The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
NTINENT BANKER The Financial Magazine of the Mississippi Valley & Southwest CONVENTION AND OPERATIONS ISSUE https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis APRIL, 1976 ®Interdependence and EFTS in an evolving environment . - :; Interdependence (Liberty style) means providing you with EFTS/Data Processing capabilities geared to an evolving environm ent. It means services and capabilities to help you maintain the position of lead ership you’ve established in your community. Just recently, National Sharedata Corporation de veloped the necessary com p u ter program s for ChecOKard . . . the card that tells everyone your check’s OK. To date, more than 20 Oklahoma banks have joined with National Sharedata in this vital ven ture. You too, are invited to ask Sharedata how you can offer ChecOKard to your merchant and DDA custom ers. And with ENTREE . . . the card your customers use like a checking account for purchases at 1.7 million merchants and for cash at 45,000 bank offices world wide . . . you now have an avenue to the future of electronic banking. 0 0 Additionally, National Sharedata has a new Inte grated Financial System data base that will help you intelligently plan and project future requirements. More importantly, you’ll be able to provide the services and programs so necessary to an aggressive market ing posture. We’ve only begun to scratch the EFTS surface. Tel lerless terminals are here . . . POS terminals are on the way. MACHA is a reality. Do you have the capabi lity to meet these challenges in an evolving electronic environment? Contact your Liberty Correspondent Department representative to discuss the im portance of Interdependence and EFTS/Data Processing for the years ahead. We want to help you maintain the position of leadership you've established in your community. at your Wli L IB E R T Y THE BANK OF MID-AMERICA Liberty National Bank & Trust Company of Oklahoma City • P.O. Box 25848 • 73125 • (405) 231-6164 MID-CONTINENT BANKER is published 13 tim e s an nually (two issues in May) at 1201-05 B lu ff St., Fulton, MO 65251. A pril Vol. 72 No 4 SecondClass postage paid at Fulton, Mo. S ubscription: $10. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis First National Bank o f Com m erce —New Orleans — recently led a fifty-bank consortium in arranging a $25 million loan which will provide the interim financing for construction o f fu el oil storage facilities located in Mississippi. The plant, when com pleted, will store vital fu el oil for subsequent pow er generating in a major portion o f the Gulf South. All banks involved in the consortium are headquartered in the South. Back in 1970, when First NBC put together the financing for the Louisiana Superdome —the largest municipal financing project in the South’s history —we proved that this region is financially a lot more potent than it was given credit for being. So when we went looking for other banks to join forces in making this new $25' million loan, the first place we looked was in the South. Our Correspon dent Bankers and our National Accounts people got on the phone and soon found the 49 other Southern banks which helped make the-loan a reality. We probably could have completed the consortium with fewer calls. To banks in the major money centers. But, to our way of thinking, we’d rather do our work here at home. First National Bank of C om m erce Correspondent Banking « 210 Baronne Street / New Orleans, Louisiana 70112 WATS Lines: Louisiana 1-800-362-8530. Alabama, Arkansas, Mississippi, Oklahoma and East Texas 800-535-8542. In other areas call collect 504-529-1371. Southern Lights. MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 HOW TO WIN TIME AND 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April. 1976 T w o tim e ly m o n e y -m a k e r s fr o m T h e F irs t N a tio n a l B a n k o f C h ic a g o 1. Cash L e tte r S e rvic e th a t d e liv ers fa s te r a v a ila b ility ; c u ts flo a t to th e bone. Being located 45 minutes away from the world's busiest airport is an advantage. And we’ve got that advantage worked down to minutes. Not just hours. After your cash letter is processed, a detailed endpoint analysis can be prepared —so we can study your cash letter composi tion and counsel you to m axim ize your availability. Our availability schedule is out standing. . . and is constantly being updated with additions to our immediate-availability list and more convenient cut-off times. This helps you in arranging your shipping schedules. Over 99% of funds deposited with us are available within one day. Your cash letters produce working funds fast! And to assure the fastest possible delivery of your cash letters to us, our corre spondent bankers have the experience and resources to custom-design a high-speed system for you. If fast availability is important to you, think First Chicago. 2. C u s to d y S e r v ic e t h a t d e liv e r s fa s te r in fo rm a tio n for surer control o f fix e d in co m e s e c u ritie s . We’re on-line; computerized. And have been for more than 2 years. • Initial receipts are sent within 24-hours of transactions. • Advices of credit for interest and maturity are sent within 24-hours. • Detailed statements of holding can be sent within 24 hours of request. • Pledge-receipts are sent to both you and pledgee within 24-hours of written authorization; faster with phone-call notice that authorization is coming. • Notices of maturing U.S. Treas ury bills and exchanges of U.S. Govern ment obligations are sent 2 weeks prior to required instruction time so you’ll have extra time for considered decision-making. • All records are tied directly to your initial receipts and assure you of “audit integrity’’. Movement of securities into or out o f our C ustody —turn around time —is expedited, swift, and controlled. F o r fu ll in fo rm a tio n on C a s h L e tte r S e r v ic e a n d C u sto d y S erv ic e, c a ll y o u r F irst N a tio n a l B a n k o f C h ic a g o c o r r e s p o n d e n t b a n k er, (3 1 2 ) 7 3 2 -4 1 0 1 , o r w rite us. I t ’s y ou r tim e ; it’s y o u r earn in g s. NFLUENCE EARNINGS. The First National Bank of Chicago |F | The Banks, B ank H olding C om panies and R e la te d A c tiv itie s D ivision. XsSgy Member FDIC MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 Bank of America NT&SA Consolidated Statement of Condition December 31,1974 Assets (thousands) Cash and due from banks: D o m e s tic ........................................................ Overseas branches and s u b s id ia rie s .................... Investment securities: United States Government and federal agencies . . State, county and m u n ic ip a l.............................. Other ............................................................. Trading account s e c u r it ie s ................................... Total S e c u r itie s ........................................ Federal funds sold and securities purchased under agreement to re s e ll................................... Loans .................................................................. Less reserve for possible loan losses . . . . Net Loans ................................................... Lease f in a n c in g .................................................. Bank premises and e q u ip m e n t.............................. Customers' liability for acceptances......................... Other a s s e t s ........................................................ Total A ssets................................... . . 1974 1975 35,000,000 34,338,956 35,000,000 34,338,956 Total Liabilities, Subordinated Capital Notes, and Equity Capital B AN K O F A ME R I C A N A T I ON A L T R U S T AND S A V I N G S A S S O C I A T I O N $ 6,901,521 11,174,293 $ 4,211,562 1,956,366 944,835 442,190 $ 7,554,953 $ 6,679,071 2,289,374 1,034,432 151,654 $10,154,531 $ 1,970,845 $30,167,184 (217,139) $29,950,045 $ 521,312 578,933 1,675,784 1,574,349 $ 1,640,922 $32,183,804 (256,827) $31,926,977 $ 584,293 677,263 974,498 1,757,391 $65,791,689 December 31,1974 Total D e p o s i t s .............................. Federal funds purchased and securities sold under agreement to repurchase . . . . Other funds b o r r o w e d .............................. Liability on acce p ta n ce s.............................. Other l i a b i l i t i e s ........................................ Total L ia b ilit ie s .............................. Subordinated Capital N o t e s ......................... Equity Capital: Common Stock, par value $6.25 . . . . Shares a u t h o r iz e d .............................. Shares issued ................................... S u rp lu s ................................................... Undivided p r o f i t s ................................... Total Equity C a p it a l......................... $ 4,943,328 9,940,024 $58,709,573 Liabilities, Subordinated Capital Notes, and Equity Capital (thousands) Demand deposits: D o m e s tic .............................................. Overseas branches and subsidiaries . . . Savings and time deposits: Domestic - S a v i n g s .............................. Time deposits: I n d iv id u a l......................... P u b l i c .............................. Other .............................. Overseas branches and subsidiaries . . . December 31,1975 December 31,1975 $ 9,221,642 4,235,988 $10,483,694 4,267,627 5,578,902 6,786,935 6,075,978 2,878,012 6,841,769 16,359,827 $51,192,118 6,012,493 2.666,365 7,965,094 19,091,908 $57,274,116 .1,875,987 368,131 1,680,707 1,552,982 $56,669,925 $ 225,845 2,618,728 443,687 981,835 2,162,927 $63,481,293 $ 225,845 $ $ 214,618 787,207 811,978 $ 1,813,803 $58,709,573 214,618 841,823 1,028,110 $ 2,084,551 $65,791,689 ME MB ER F E D E R A L D EP OS I T I NSU RAN CE C ORPOR ATI ON ME MB ER F E D E R A L R E S E R V E S Y S T E M 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April. 1976 Cut the travel tim e of your overseas d rafts and collections in half. When y o u ’re processing foreign drafts and documentary collections, the shortest distance between two points is a straight line. So from now on, with Chase’s new service, you can send your foreign drafts and coi tions directly to the overseas bank, without taking a time-consuming de tour through your New York corres pondent. It’s a Chase advantage that can save over a w eek’s time co m pared to the service offered by most othe r banks, and the drafts and collections will still remain under our control. What does that mean to you? It means that if y o u ’re a c o rre s p o n d e n t of Chase, you can provide better, faster service for your custom ers. Their drafts will be executed quicker and their collections completed faster. And a customer who gets better ser vice from you is a custom er w ho’s more satisfied with you. How does our new service work? It’s very simple. We provide you with pre authorized forms for drafts and docu mentary collections. That way, you give an immediate confirm ation to yo ur c u sto m e r and you send the action form directly overseas, without having to send it through New York. If you’d like to receive more informa tion about how you can cut overseas draft and collection travel time in half and an explanation of how Chase’s other international services can give your bank a competitive advan tage, call a Chase Relationship Man ager collect at [212) 552-3192 or just fill out and mail in the coupon below. Give your bank the Chase Advantage® I-------------------------------------------------------------------------------- 1 I Chase Relationship Manager l I Correspondent Banking Division I P.O. Box 217, Bowling Green Station I New York, New York 10004 I I i 1 □ Please have a Relationship Manager contact me regarding foreign draftsand documentary collections. □ Send me more information on other international ser- | vices so my ban kcan have acompetitive advantage. Name_____ ._________________________ Title--------------- 1 Bank--------------------------------------! Address-------------------------------------------, City _________________ State--------------- Zip------------ ! Phone ( ) - ------------------------------------------------------— i ©Chase Manhattan Bank, N.A. 1975 MEMBER FDIC MID-CONTINENT HANKE« for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I____________________________________________________ I 7 Bank on more from Mercantile... Our resources are assets to you. The point is, at Mercantile, you get all the services you’d expect from one of Am erica’s largest correspondent banks. And more. But the biggest asset of all is our eagerness to work for you! Count on Mercantile. Where you count. M E R c n rrn u s B R fK Central Group, Banking Dept. * Mercantile Trust Company N.A. (314)425-2404 • St. Louis, Mo. • Member F.D.I.C. 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 197 6 Convention Calendar April April 18-23: Robert M orris Associates Loan Management Sem inar, Bloomington, Ind., Indiana University. April 21-23: A BA Governing Council Meeting, White Sulphur Springs, W. V a., the G reen brier. April 21-24: Independent B ankers Association of A m erica Sem inar/W orkshop on Bank Ownership, New Orleans, Royal Orleans Hotel. April 22-23: R obert Morris Associates Lending to Banks & B ank Holding Companies W ork shop, A tlanta, P each tree Plaza. April 25-27: ABA Southern T rust Conference, Pinehurst, N. C. April 25-27 : ABA Southern Regional Bank Card Conference, Richmond, Va., Richmond H yalt House. April 25-28: A BA National Conference on Real Estate Finance, Dallas, Fairm ont Hotel. April 25-29: B ank ers Association for Foreign Trade Annual Meeting, Hot Springs, Va., the Homestead. April 25-30: ABA National C om m ercial Lend ing Graduate School, Norman, Okla., Uni versity of Oklahoma. April 25-30: ABA Community B ank CEO Program , Palm B each, F la ., L a Coquille Club. A pril 25-30: R obert M orris Associates Loan M anagement Sem inar, Bloomington, Ind., Indiana University. April 28-29: Independent Community Banks in Illinois A nnual Convention, Springfield, Foru m 30 Hotel. April 29-M ay 1: A B A M eeting W ith the Com ptroller of the C urrency, B uck Hill Falls, Pa., B uck Hill Inn & Golf Club. May May 1-3: Louisiana B ankers Association’s A n nual Convention, New Orleans, Fairm ont Roosevelt Hotel. May 2 -4 : ABA B ank Planning Officers W ork shop, Chicago, M arriott Motor Hotel. May 2 -4 : Association for Modern Banking in Illinois Annual Convention, Lincolnshire, 111., M ariott-Lincolnshire Resort. May 2 -4 : T exas B ankers Association Annual Convention, El Paso, E l Paso Convention Center. May 2 -4 : B an k Adm inistration Institute Northern Regional Convention, Chicago. May 2 -5 : B an k M arketing Association M ar keting R esearch Conference, Chicago, H y a tt R egency-C hicago. May 2 -7 : A B A National Personnel School, Arlington, Va., Ram ada Inn. May 5 -7 : Kansas B ankers Association Annual Convention, W ichita, Holiday Inn Plaza. May 9-12: Conference of State B ank Super visors Annual Convention, Colorado Springs, Colo., the Broadm oor. May 12-13: ABA Liab ility /A sset M anagement Policy Decisions Sem inar, San Diego, Sh era ton Harbor Island. May 13-14: R obert Morris Associates In te r national Lending Workshop, Chicago, H yatt Regency. May 13-16: National Association of B an k Women Inc. R ocky M ountain/W estern R e gional Conference, Albuquerque, Hilton Inn. May 16-18: B ank M arketing Association “ Train the T rainer” Sem inar, Rosemont, 111., Holiday Inn-O ’H are/K en ned y. May 16-18: A BA National M arketing Con ference, New Y ork City, W aldorf Astoria. May 16-18: Missouri Bankers Association A n nual Convention, St. Louis, Stouffer’s R iver front Inn. May 16-18: B ank Administration Institute Southern Regional Convention, Oklahoma City. May 17-18: Robert M orris Associates Secured Lending, A ccounts R eceivable, Inventory & Eq uipm ent-Financing Workshop, Boston, Copley Plaza. May 18-22: Alabama B ankers Association A n nual Convention, San Ju an , P . R ., Sheraton Puerto Rico. May 22-26: Mississippi B ankers Association Annual Convention, Biloxi, B iloxi H ilton/ B roadw ater Hotel. May 23-25: Tennessee Bankers Association Annual Convention, Nashville, H yatt R egency-Nashville. May 23-25: Illinois Bankers Association A n nual Convention, St. Louis, Stouffer’s R iver fron t Towers. Volume 1 2 , No. 4 FEATURES 29 EFTS: W h at’s happening today w ill shape tomorrow / . Rex Duwe 33 AUTOMATED CLEARING HOUSES They’re a bridge to E FT S Rosemary McKelvey 46 EFT PACKAGE PLANS AVAILABLE TO CORRESPONDENTS Most include A TM /PO S capability 64 MARKETING EFT SYSTEMS The psychology of convenience and change Jack W . W hittle 72 TRACK RECORD REVEALS EFT SUCCESS STORY How a $90-m illion bank made it with A TM s Larry W right 76 THE SELLER RULE A new quandary for lenders Paul J. Pfeilsticker CO NVENTIO NS 91 AMBI MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis April, 1976 95 LOUISIANA I 13 KANSAS 101 TEXAS 87 FIRST TIMERS DEPARTMENTS 12 THE BANKING SCENE 16 CO M M UNITY INVOLVEMENT 21 NEWS ROUNDUP 14 BANKING WORLD 22 INSTALLMENT LENDING 18 SALES/MARKETING 24 CORPORATE NEWS 24 NEW PRODUCTS STATE NEWS 126 ALABAM A 128 IN D IAN A 130 MISSOURI 126 ARKANSAS 128 KENTUCKY 131 NEW MEXICO 126 ILLINOIS 128 MISSISSIPPI 131 O KLA H O M A 132 TENNESSEE inniiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiHiiiiiiiiiiiinniiniiiinininiminiiinniiininniiiniiiiniiiiniinnimiiniiniiiniiiiininniiiiiiiiiiiniinininiiinniiiniiiiiiiniiiiiiiiiniiiiiiiiininiiniiiiiiiimiiiiiiiiiiiinnmiinimii Editors Ralph B. Cox Editor & Publisher Lawrence W. Colbert Assistant to the Publisher Rosemary McKelvey Managing Editor Jim Fabian Associate Editor Daniel H. Clark Editorial Assistant A dvertisin g Offices St. Louis, Mo., 408 Olive, 63102, Tel. 314/ 421-5445; Ralph B. Cox, P ublisher; Mar garet Holz, A dvertising Production Mgr. Milwaukee, Wis., 161 W. W isconsin Ave., 53203, Tel. 414/276-3432; Torben Soren son, A dvertising Representative. MID-CONTINENT BANKER is published 13 tim e s an nually (two issues in May) by Commerce P ublishing Co. at 1201-05 B luff, Fulton, Mo. 65251. Editorial, execu tive and business offices, 408 Olive, St. Louis, Mo. 63102. Printed by The Ovid Bell Press, Inc., Fulton, Mo. Second-class postage paid at Fulton, Mo. S ubscription rates: Three years $21; tw o years $16; one year $10. Single copies, $1.50 each. Commerce P ublications: Am erican Agent & Broker, Club Management, Decor, Life Insurance S elling, M id-C ontinent Banker, Mid-Western Banker, The Bank Board Letter and Program. Donald H. Clark, chairm an; Wesley H. Clark, president; Johnson Poor, executive vice president and secretary; Ralph B. Cox, firs t vice president and treasurer; Bernard A. Beggan, William M. Humberg, Allan Kent, James T. Poor and Don J. Robertson, vice presidents; Lawrence W. Colbert, assistant vice president. 9 s 71 j~J& % The money management system of the future is here now. Bank customers w ill be able to start using the system this summer. And w hat a system it is. SCS Service Card System is more than just check verification. It's a statewide electronic network offering numerous financial services including checkless transactions to consumers, merchants and financial institutions. The system is operated by a single plastic customer card, utilized w ith on-line Point-of-Sale and A TM terminals throughout the network. If you're a financial institution, you maintain local identity by using your own name on the card along with the SCS logo. The single SCS card enables you to offer customers the convenience of access to their accounts anywhere in the state they see the SCS sign. They make purchases by transferring funds, get cash w ithout a check, even make deposits to their accounts. Stillw ater National Bank is the first bank to join SCS w ith its own Gold Key Card. O th e r banks will participate soon after. W ithin a year, approxim ately fifty banks w ill be on-line representing over one m illion customer accounts. SCS and IBM have worked closely perfecting this highly sophisticated system. It provides more on-line services than any data processing system in this area. The system utilizes the IBM 3614 ATM and the soon to be introduced 3608 POS term inal with integrated 45 character printer for sales slips, and other documents. O ne great advantage to members is the automatic "instant" interchange of funds between participants providing the greatest security and control ever. For the future, SCS w ill expand its system even farther into adjacent states so that tom orrow "across the country w ill be across the street." https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SfHVIDEOAl . L f ■ ; : I : S i ■11 ■ : : I : DROSS TH E STATE SS TH E ST R E E T g h « i VWM''WmMm''W*j ’■ A fl H J f: , ■V |V«S JI M X e d / \ ~ 5<7 SERVICEGARBSYSTEM I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A complete marketing program including cards, forms, training, installation and advertising is provided j by SCS. If you're talking about oney management systems, you're talking about the future and SCS Service Card System. W e 're there and beyond. ?nt of Firs» Data Management Company for Participating Financial Institutions' Fu? iformation, contact Ted Shaw 120 North Robinson, P.O. Box 2518 ‘t Oklahoma Citv 73125 14051 272-4063 The Banking Scene By Dr. Lewis E. Davids Hill Professor of Bank Management, University of Missouri, Columbia Business Faces the Disclosure Dilemma AST JANUARY, Bank of America drafted a voluntary code on dis closures. The bank’s president, A. W. Clausen, noted that the code’s objective was to assure “full, fair, adequate and honest reporting of material events.” He also pointed out that his bank in the past had been charged with finding a means of accomplishing that end, be cause the bank felt that voluntary dis- L "Ethical blindness an d the evasiveness o f a ra tio n a le fo r misconduct th a t have em e rg e d fro m recent in vestig atio n s h av e subjected e v e ry o n e in business to a fo rm o f d isg race ." closure of information beyond that de manded by regulators and legislators was an imperative next step in the evolution of corporations. That step would provide a key direction for American business, Mr. Clausen said. “Ethical blindness” and the “evasive ness of a rationale for misconduct” that have emerged from recent investiga tions have subjected everyone in busi ness to a form of disgrace, he said. “The public is rightly skeptical of our practices and preachings and to re verse this skepticism we must initiate strong and specific measures to show we’re serious about our own integrity and the way we put it to work,” Mr. Clausen stated. The charge to the Bank of America task force was to spell out its ethical standards and convictions for Bank America Corp. and its sub sidiaries, as well as the precise be havior expected from all its employees. This, he said, would be accomplished largely by publicizing the bank’s exist ing standards. 12 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Another step to voluntary disclosure wasn’t by a bank, but it received con siderably more publicity. That was the decision by Gulf Oil’s outside board of directors to terminate some inside di rectors and senior operating officials due to their alleged illegal activities in use of corporate funds for political con tributions and bribes. Commentaries on Gulf’s decision pointed out that the audit committee of its board hadn’t been given answers to specific ques tions concerning those matters. The Securities and Exchange Com mission (SE C ) has been investigating such actions by major corporations, looking for cases of bribery and political contributions in which the use of past “wash” transactions hid from corporate owners any specifics of illegal activities. I support the concepts of Mr. Clau sen. Much of the pressure of federal and state regulatory agencies in the area of disclosure has been predicated upon new social attitudes, attitudes that have been contrary to the prevail ing practices not only of many busi nesses, but especially of banks. What’s interesting is that there’s a belief—on the part of some leaders in banking— that codes are very important for banks. Yet, bank spokesmen have shown a re luctance to make these available for public review. It’s not because they’re ashamed of them, but because they might be misinterpreted by the general public, which could see the code’s pub lication as self-serving. More than one top banker has told me that he and his peers prefer to have their good deeds speak for themselves and not be broadcast as a form of PR. Here is the dilemma: If good works are done and not publicized, much of the public may be ignorant of the so cial contributions of the institution. On the other hand, public relations forums or press interviews for directing atten tion to the good actions of an institu tion have been considered to be in questionable taste. What is considered a good and de sirable step at one time often can be perceived in a much different light a few years later. 1 can recall situations where major corporations have been requested to cooperate with the fed eral government in extremely delicate . . pressure b y . . . re g u la to ry agencies in the a re a o f disclosure has been p r e d icated upon n e w social a t titu d es , a ttitu d e s th a t have been c o n tra ry to th e p r e v a il ing practices, not o n ly of m a n y businesses, b ut espe c ia lly o f b a n k s ." situations in foreign countries. Witness one such situation, where a major multi national corporation cooperated with such a request by the American govern ment. It provided the U. S. with some economic data which, incidently, was contrary to the official data of the host country. Some years later, that same company was criticized both in Amer ica and in the host country for med dling and trying to influence internal conditions. Another area of concern is reverse discrimination, where attempts to rati fy or come to grips with affirmative-ac tion programs may be construed as a reverse form of discrimination. President Clausen noted that he wanted his bank to engage in full, fair, adequate and honest reporting of m a terial events. The whole concept of materiality from a technical accounting point of (Continued on p ag e 134) MID-CONTINENT BANKER for April, 1976 WI can agribusiness < crossing the street. You’re very likely to be loaned up seasonally if you have large agribusiness customers. That means overline financing, sometimes loan participation. I think you get a better deal on both with a big bank like United Missouri. Our own large correspondent business means were not after your customers. We just want to help you serve them better. If this makes sense to you, my „ C ali me1”6800' W united missouri bank H U I ° f k a n s a s c i t V' n * a - ]oe Henderson. He runs United Missouri’s Agribusiness division. MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 BANKING WORLD BARKSDALE FO RD • Clarence C. Barksdale has been elected chairman and CEO, First Na tional in St. Louis, succeeding Edwin S. Jones, the former chairman. Named president and chief operating officer at the bank was Richard F. Ford, for merly executive vice president. Mr. Jones has been elected executive com mittee chairman. Mr. Barksdale joined First National in 1958 and advanced to president in 1970. Mr. Ford joined the bank as vice president in 1969 and was named executive vice president in 1973. Messrs. Barksdale, Ford and Jones continue in their positions at the bank’s affiliate, First Union, Inc., St. Louis— Mr. Barksdale as president and chief operating officer, Mr. Ford as executive vice president and Mr. Jones as chairman and CEO. • Lawrence K. Rons, formerly ex ecutive vice president, First National in St. Louis, has been appointed presi dent of the St. Louis Fed. He succeeds Darryl R. Francis, who has retired. Prior to his position at First National, Mr. Roos was St. Louis County super visor, 1962-74, and, before that, presi dent, Mound City Trust, St. Louis, and chairman, First Security Bank, Kirk wood, Mo. GUFFEY ROOS • Roger Guffey, senior vice presi dent, general counsel and secretary of the Kansas City Fed, has been ap pointed president, following the retire ment of George PL Clay. Mr. Guffey joined the bank in 1968 as general counsel and secretary. He was named to the additional post of vice president in 1971 and senior vice president in 1973. Prior to his promotion, he had been the senior officer responsible for the Fed’s administrative services divi sion. Mr. Clay joined the bank in 1958 as vice president and general counsel and advanced to president three years later. • First National City Bank, New York City, is no more. For 164 years, the institution has Ireen called by the nickname “Citibank,” so that is its new official name. Along with the name change, Citibank and its parent HC, Citicorp, have adopted new logotypes and a common corporate symbol. • Robert E. Barnett has been con firmed by the Senate as successor to Frank Wille as FD IC chairman. The latter retired after a six-year term. Mr. Barnett has been deputy to Mr. Wille and was nominated to the top post by President Gerald Ford. P E N IC K • Edward M. Penick, chairman and CEO, Worthen Bank and its HC, First Arkansas Bankstock Corp., both of Little Rock, has been appointed chair man of Comptroller of the Currency James E. Smith’s National Advisory Committee. Other Mid-Continent-area bankers appointed to the committee are Sharnia “Tab” Buford, president, Doug lass State, Kansas City, Kan.; Walter F. Johnson, president, First National, Abilene, Tex.; Ernest F. Ladd Jr., chairman, Merchants National, Mobile; W. O. Roberson, chairman, First Na tional, Brownsville, Tex; Samuel Sax, chairman, Exchange National, Chicago; and William H. Vernon, chairman, Santa Fe (N. M .) National. Purpose of the committee is to assist the Comp troller in a continuing review aimed at keeping bank regulations abreast of the nation’s needs. • Ernest G. Gearheart Jr., former president, Financial Public Relations Association (now the Bank Marketing Association), has retired as vice chair man, Farmers Bank of Delaware, W il mington, after 10 years there. He head ed the bank’s personal and retail bank ing group. Mr. Gearhart worked in marketing most of his 43-year banking career. FARMERS GRAIN & LIVESTOCK HEDGING CORP. LOOKING FOR IMMEDIATE A C C U R A T E INFO RM ATIO N TO DEAL WITH TODAY'S WILDLY FLU CTU A TIN G GRAIN & LIV E ST O C K M A R K E T ? OUR ONLY BUSINESS WRITE OR CALL FG L« 1200 35th St, West Des Moines. Iowa 50265 515 223-2200 I4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IS ADVICE io m l / v jo c MID-CONTINENT BANKER for April, 1976 From then to now weve planned and built or remodeled more bank buildings than any other company anywhere. Since our beginning in 1913, when we were known as the St. Louis Bank Fixture Co., we’ve pioneered many designs, concepts and methods that are now Bank Building Corporation ' 4 / ‘in f c l S S t l l S Helping banks and bank.ng since 19,3 Up” bank lobbies. We introduced drive-in Client Service banking. We have developed a revolu tionary concept in preplanned bank buildings. And on more than 6000 projects we’ve helped banks increase earnings through proper planning, design and construction (or remodeling) of their buildings. May we help you? We have a man right in your area. M ississip p i, G e o rg ia , T e n n essee and K e n tu c k y : 4 0 4 / 6 3 3 -2 9 7 1 A rk a n s a s, L o u isia n a , O k la h o m a and T e x a s: 2 1 4 / 6 3 0 -1 1 3 1 M isso u ri, Illin o is and In d ia n a : 3 1 4 / 6 4 7 -3 8 0 0 j https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ______________________ —....--------------P lease send m e a c o p y o f y o u r b ro c h u re , “H ow T o D e term in e W h e n , H ow and W h y Y o u S h o u ld R e m o d e l.” M C -4 7 6 N am e ------------------------------------- — ---------------------------------------------- A d d re s s . j MID-CONTINENT BANKER for April, 1 9 7 6 _ Bank Building Corp., 1130 Hampton Ave., St. Louis, M O 63139 C ity, S Stta te and Z ip ________________________ — J 15 Two-Way Education: Live K in d e rg a rte n Class Is H e ld in Bank L o b b y In keeping with American Education Week’s theme, “Stay Involved,” Millikin National, Decatur, 111., has held a live kindergarten class demonstration in its lobby. All normal classroom activities took place, including music and art instruc tion, and passers-by could view the proceedings through Millikin National’s windows. A loudspeaker kept those outside informed of the progress with in, while a schedule of the week’s itinerary was provided. As the accompanying photo shows, the children were seemingly oblivious to the onlookers and banking activities. The Philharmonic: I st N B C of N ew O rleans Sponsors Two C o n c e rts First National Bank of Commerce, New Orleans, has sponsored two sub scription concerts by the New Orleans Philharmonic-Symphony Orchestra. The concerts, which were held in the New Orleans Theater of the Performing Arts, featured pianist Jeffrey Swann and the Mobile College Concert Choir. Community Involvement The Second 200': Bank-Sponsored C o n te s t A w a rd s P a trio tic W rite rs The Second 200 contest, a nation wide bicentennial competition, was sponsored by Fiberty National, Okla homa City. Purpose of the contest was to en courage people to take a positive for ward look to and consider the nation’s goals over the next 200 years. Contes tants wrote—in 200 words or less— their thoughts and ideas on ways to pre serve personal liberties, freedoms and independence during that period. Over $10,000 in cash awards was of fered for the competition, with a first prize of $1,000; second prize of $750; and a $500 third prize. Those entries winning fourth through 20th places will receive $150; 21st through 50th, $50; and 51st through 200th, $25. Names of winners will be announced July 4. The contest, which began accepting entries from across the country last July 4, has been recognized by the Bank Marketing Association. The bank received the BMA’s “Gold Coin Award of Merit” in the public affairs category last fall. The Oklahoma Council on Economic Education has been given the task of judging the more than 500 entries re ceived, based on originality, legibility and contribution to the preservation of personal liberties and individual free doms. Living M e m o ria l: Clothing for Guatemala Trees A re Bank's G ift In M e m o ry of W a s h in g to n Citizens National, Bowling Green, Kv., has created a “living memorial” to George Washington and to its com munity by donating eight cherry trees, which have been planted in the city’s Fountain Square Park. The cherry trees are of a special hardy variety, according to a bank spokesman, and will withstand great variations in temperature, will have a vivid pink blossom and a very fine aroma. The event not only tied in with Washington’s birthday, but served as a part of Citizens National’s bicentennial celebration. 16 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C h a rle s S a v a g e (c.), v .p ., First A la b a m a B ank, M o n tg o m e ry , turns over 2 ,2 0 0 a rticles of clo th in g to M itc h e ll K irk la n d (I.) a n d C a rl S tiven er o f th e A m e ric a n Red C ro s s -M o n tg o m e ry C h a p te r. The b a n k -d o n a te d clo th in g has been sent to e a r th q u a k e victim s in Escuintla, G u a te m a la , M o n tg o m e ry 's sister city. Crime Deterrents: Banks Sponsor Seminars O n Bogus Cash, Theft Counterfeit money, bogus checks and shoplifting were the topics of informa tional seminars for business owners and citizens around the St. Fouis area, sponsored by TG Banks, HC affiliate for Tower Grove Bank and Continental Bank of St. Louis and House Springs Bank. The 90-minute programs featured spokesmen from the circuit attorney’s offices of St. Louis and St. Louis County and Jefferson County. Also on hand were members of the shoplifting squads of the St. Louis, Clayton and Jefferson County police departments. Admission to the seminars was free, and refreshments were served at the conclusion of each one. Helps M e e t Objectives: In stitu tio n Engages Firm To G ive Financial Counsel Cullen Center Bank, Houston, has entered into an agreement with Oak land Financial Group, Inc., Charlottes ville, Va., to provide professional finan cial counseling to residents and com panies of the Texas Gulf Coast area. Under the agreement, the bank and the financial group will offer a “customdesigned and coordinated strategy to help individuals reach their financial objectives in life,” according to a bank spokesman. The service is said to elimi nate piecemeal financial planning for individuals earning over $50,000 yearly. The program begins with a financial health checkup.” The individual is in terviewed in detail in order to define his personal objectives, financial philosophy and concerns. Discussions are taped for continuous reference during analysis by Oakland’s staff. After a detailed study, a comprehensive written report is pro duced for the client, giving explicit financial recommendations. Oakland then meets with the client, making sure he throughly understands the findings and conclusions of the analysis. The firm also works with the clients’ advisers, ensuring implementa tion of the plan. What other benefits does the service offer? Avoidance of such pitfalls as ab sence of wills, poor retirement or disa bility planning, low-return tax-shelter investments and failure to maintain adequate liquid reserves, according to Cullen officials. Oakland indicates that, in over one-third of its cases, it has discovered through review of back tax records that refunds were due clients. MID-CONTINENT BANKER for April. 1976 Their credit life teacher is the best. Last year ex-Standard Life salesmen wrote more than $15,000,000 of credit life premiums for their companies. And we’re proud of them. We’re glad to see other companies in the credit life field, even when they’re staffed with ex-Standard Life representatives-because Standard pioneered credit life insurance in this area, and we’ve been the pacesetters ever since. That’s because we take credit life seriously. We’ve never considered it a sideline. And we’re proud to point out that Standard Life writes more credit life than any company in our area. In fact, most of the new things in the field were created by Standard. So, you can bet those salesmen know credit life. They learned it from the Standard in the business. Now, they only have one problem. We’re continuing to set the pace. And they’ll have to work very hard just to keep up. Contact our home office for more information. Standard Life Insurance Com pany/Jackson, Mississippi MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 Selling / Marketing Fill Er Up? Bank in North Carolina Offers C ut-R ate Gasoline to Customers TN D IRECTLY, the energy shortage has led to an unusual marketing pro gram at United Citizens Bank, WinstonSalem, N. C. That institution is offer ing gasoline to its customers at cutrate prices—about 49 cents a gallon. The pumps are activated by plastic cards used by the bank’s customers. A record of the sale is transmitted through the data link at the pumps to a com puter owned by Pace Oil, the firm sup plying the gas. About 2,000 cards have been issued so far, according to a bank spokesman. The owner of the oil company also is a United Citizens director and one of the idea’s originators. Since banking regulations prohibit a bank from offer ing gasoline products, Pace Oil owns the computer and the pumps. The bank merely supplies the locations and the customers. Who may use the service? Any cus tomer of the bank, be it a loan custom er, depositor or user of any other bank service. A United Citizens official states that those using the gasoline are able to save about $10 monthly on normal operating costs of their automobiles. A pilot project originally was run to test the concept. Gasoline was “sold” This is n e w id e a in " p r e m iu m s ." U n ite d C itizen s B a n k, W in s to n -S a le m , N . C., issues p la s tic cards to custom ers, cards a c tiv a te g a s o lin e p um ps t h a t d ip en se discoun t fu e l. Pum ps a n d com p u te rs t h a t record tra n s a c tio n a r e o w n e d by Pace O il, c o m p a n y t h a t su p plies g a s — b a n k p ro v id e s custom ers a n d lo catio n s. from pumps near United Citizens’ drive-up windows. Officials say all the “bugs” have been worked out of the system, so the cut-rate fuel will be offered at four sites, although two lo cations were in operation at press time. To sell the service, the bank has undertaken a concentrated advertising program involving radio and newspa pers. What is the future of this concept? Only the fates know, but it was with a small bank such as United Citizens that “free” personal checking was begun. * • Changing Tastes: Bank Launches P rom otion By P roviding Free Lunch Farmers State, Albert, Kan., has in vited area residents to change their banking “tastes” with a new image flavored with Smucker’s jams and jellies. The institution’s “Country Money Store” theme—featuring “old-fashioned friendliness”—was launched with a free barbeque for 800 invited custom ers and prospective customers. Large jars of the Smucker’s product served as door prizes. Then, the bank launched its media campaign, preceded by delivery of 3,500 jars of free jelly to area residents. Accompanying the Smucker’s jelly was a letter from Bill Robbins, bank presi dent, telling of the premium offer, wherein customers could obtain gift packages of Smucker’s products with deposits. A brochure explaining the bank’s services and a postage return card also accompanied the free jelly. The promotion, which was created and handled by Lane & Leslie Adver tising Agency, Inc., Wichita, was more successful than anticipated, Mr. Rob bins said. A Capsulized History: People of 2076 and 2 I 76 To G e t View of This Year What was life like back in 1976? That’s a question citizens of Bowling Green, Ky., will have answered in the future when two time capsules—to be placed by Citizens National— are opened. As part of its “Big Spring Bicen tennial Celebration,” the bank will seal the capsules on July 1. One will be opened in 2076, while the second is slated for a 2176 opening. To be preserved in the bank’s vault, the capsules will contain newspapers, radio tapes, video tapes, signatures and messages from area citizens, books, pic tures, reports and other items of in terest. The bank also is preparing original art, music, environmental and educa tional programs as part of its celebra tion of the national heritage. 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Iowa Rings Up 'No Sale' Should banks be allowed to sell such merchandise as coin banks and clutch purses on their premises to get new business? Aren’t these sales a way to promote thrift, which is one of the essential missions of a bank? Evidently, the state of Iowa doesn’t think so because it has a law that prohibits “the selling of tangible merchandise by supervised lenders.” Exceptions include occasional sales of property used in the ordinary course of business and sales of items of collateral of which lenders have taken possession. However, according to Iowa’s as sistant attorney general, Julian B. Garrett, tire legislature may change this law to allow sales of small items on not-for-profit bases. Bill Robbins (I.), pres., F arm ers S ta te , A lb e rt, K a n ., joins guests a t b a n k -s p o n s o re d b a rb e q u e kickin g off Farm ers S ta te " C o u n tr y M o n e y S to re " p ro m o tio n w h ic h fe a tu r e d S m ucker's g ift sets fo r d ep osits. From I., G en e L in e n b e rg e r, s.v .p .; Leo Vap, v .p .; a n d Bill R o bbins, p res., A lb e r t, K a n ., d r a w n am es fo r Farm ers S tate, d o o r p rize s o f Sm ucker's je lly d u rin g b a n k 's kicked o ff p ro m o tio n o ffe rin g sets f o r d ep osits. b a r b e q u e th a t Sm ucker's g ift Behind every Security vault door you'll find our basic philosophy: cut the cost without cutting important features. Features like gleaming, no-maintenance satin-finished stain less steel over the entire door surface. With no raw steel edges to rust, no expensive buffing. But good looks are just the beginning. Other standard features on all doors include: our exclusive "Snorkel" emergency ventilator, built directly into the vault door frame', a full 36" clear opening for easy access by teller busses, and a choice of acrylic or stainless steel daygates. BEHIND DOOR NO. 1 you'll find everything you'd expect from a high-priced door except high price.The International's entire door slab is reinforced with KT-20 monolithic metal to resist torches, drills and explosives. Your choice of door thicknesses: 3%" 7" or 10!' These and other features make the International the biggest selling vault door in the world today. BEHIND DOOR N 0 .2 ' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis you'll find proof that pressure lock security can be beautiful. The Saturn II features eight massive locking bolts that close up pressure tight. KT-20 covers the entire door area. Available in 3 / 2!' 7" and 10" door thicknesses. And it's the only standard pressure system door in the world with immediate delivery. BEHIND DOOR NO. 3 you'll see the big door you can swing on a small budget. The Continental's full-length locking bar assures top-to-bottom contact with the locking jamb. KT-20, the protective metal inlay, covers the entire lock area.The Continental is available in a 3 / 2 " door thickness. And it's a lot of door for the money. If you have an opening for a vault door that's as functional as it is good-looking, Security has one ready for immediate delivery. For complete information, write or call today. Security Vault Doors. r " p r i j n i T M Quality. Extra features. And the price is right r r jR P n R f lT in n L U n r U n H IIU II 2055 S.E. Main Street, Irvine, Calif. 92714, (714) 979-9000 .^ : ; The Amiel Industries AIA heavy-duty coin block 9100 heavy duty automatic assembly and easy access coin wrapping machine is doors which make mainte the biggest little automatic nance a snap... coin wrapper you can buy... Sound-proofed with Big in coin hopper capa styrofoam throughout, the city, holding 10,000 coins AI-9100 is super quiet...so (or up to 30,000 using our quiet you can operate it special hopper adapter), right up front. (You don’t big in wrapped coin produc have to hide it in the tion, with a throughput of basement or backroom like 18 rolls per minute... big in you do some antiquated experience, with the AI-9100 machines). having thousands of hours of proven workload. For your coin wrapping needs, make it the Yet it is little in size, the smallest, most- AI-9100, the biggest little coin wrapper in the compact coin roller engineered for tomorrow’s business... and best of all, the AI-9100 looks as needs; built with advanced solid state electronics. good as it works, and works as good as it looks. Corporate Office: 3 0 0 0 Clearview Parkway Atlanta, Georgia 3 0 3 4 0 (404) 45 5 -0 0 9 0 1285 Rand Road, Des Plaines, Illinois 6 0 616 (312) 29 9 -6 6 3 0 »Plaza 66, Bldg. B-8, Mt. Prospect Avenue, Clifton, New Jersey 07013 (201) 4 73-0166 •2101 Ferry Avenue, Suite 6 0 4 .1 8 0 0 Pavilion, Camden, New Jersey 08104 (609) 9 6 2 -9 4 9 0 * 2 2 8 4 Weldon Parkway, St. Louis, Missouri 63141 (314) 567-3323 • 12830 Hillcrest Road, Dallas, Texas 7 5 2 3 0 (214) 387-4579 • 325 Corey Way, S. San Francisco, Cal. 9 4 0 8 0 (4 1 5)873-0316 * 3 9 5 Freeport Btvd. #10, Sparks, Nevada 89431 (702) 3 5 9 -9588 • 1165 Edinboro Drive, Boulder, Colorado 8 0 3 0 3 (303) 499-1663. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis y» v AM IEL INDUSTRIES ~~ j The World’s Leader in Coin & Currency Handling Systems & Equipment. NEWS ROUNDUP News From Around the Nation FDIC Proposes Disclosure Amendments The F D IC has issued for comment three proposed amendments to the disclosure rules for insured state non member banks having registered securities. The amendments would allocate the reserve for loan losses three ways. The valuation portion would be de ducted from loans; the deferred tax payable would be re flected as another liability; and the contingency portion would be included in undivided profits. Also, subordinated notes and debentures would no longer be grouped with stockholders’ equity under the caption “capital accounts” but would instead be shown after total liabilities. Loans would be shown net of unearned income. The proposed changes are being issued to bring the F D IC ’s regulations into substantial conformity with those of the SEC, in accordance with the Depository Institutions Act of 1974. Pooled Funds Interest Curb Proposed Regulators have issued proposals to block the pooling of funds as a way to beat federal interest rate ceilings on deposits of less than $100,000. If adopted, the proposal would apply when a bank or S&L knows or has reason to believe that the object of pooling is to circumvent rate ceilings. Four types of pooling would be exempted: the com bination of funds by trust departments to make use of tem porarily idle funds from a number of trust accounts, a similar combination of funds by an attorney acting in a custodial or fiduciary capacity for funds held in escrow in a bank, a combination of funds by an individual or or ganization that previously held its funds in various ac counts or the offering of large CDs to a mutual fund that invests only a “minimal” percentage of its portfolio in CDs. Comment is invited by the Fed until May 10. Overdraft Coverage Proposed The Fed and the FD IC have proposed to allow member banks to cover overdrafts by transferring funds auto matically from a customer’s savings account to his check ing account. Thus, a depositor with savings and checking accounts at a bank would be permitted to have specified amounts of funds, in multiples of $100, transferred from the saving account in case of an overdraft; to authorize an automatic transfer of funds when the customer’s checking account balance falls below a predetermined level; and to allow MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis removal of savings to the bank directly, without transfer to the checking account, in case of an overdraft. The depositor would forfeit at least 30 days’ interest on the amount of savings transferred to pay for the service. Comments will be accepted until May 14. FDIC Issues Insider Regs The FD IC has finalized regulations to curb abuses by insiders. Directors or owners of 10% or more of a bank’s voting stock are covered. The regulations require boards to approve all insider transactions in amounts varying with bank size. Banks having up to $100 million in assets would need board approval of all insider transactions in excess of $20,000. Boards of banks with from $100 million to $500 million in assets would have to approve all insider trans actions in excess of $50,000 and boards of banks larger than $500 million would have to approve all insider trans actions over $100,000. Also, detailed records must be kept by banks and re viewed by examiners seeking evidence of unsafe or un sound practices or insider abuses. CD Rates Pegged to T-Bills? The F D IC has proposed allowing some banks to offer CDs with interest rates pegged to Treasury bill auction rates. The proposal would apply to FDIC-insured com mercial and mutual savings banks that are not Fed mem bers. It would cover deposits of at least $1,000 left on de posit for two years or more. Under the proposal, the rate on variable-rate time de posits at commercial banks would vary quarterly depend ing on rates of 13-week Treasury bills in the preceding quarter. The rate would be the average of four weeks’ coupon rate at the Treasury’s weekly auction of 13-week bills. The four weeks upon which the calculation would be based would be those immediately before the first day of the third month in the quarter. The rate would be pub lished in the first five days of the third month of each quarter, permitting banks about 25 days to advertise the new rate before it became effective. Rates for mutuals would be one-fourth percentage point higher than those for commercial banks. Banks would be permitted to set a minimum amount below which rates couldn’t fall to protect depositors, but the floor couldn’t be higher than 4/2%. Banks could also set a ceiling rate. The FD IC said the variable rates would be less expen sive for banks than the current four- and six-year fixedrates. Comments will be accepted through May 15. 21 Installment Lending Indu stry-W id e Cooperation Is Solution To Problems in Manufactured Housing By ROLLIN R. WILLIAMS Executive Director Manufactured Housing Financial Services Association Nashville HIS W IL L BE an improved year for the manufactured-housing in dustry. It w ont be outstanding, but im provements will come in the areas of product quality and cooperation among various industry segments. There will be problems in availa bility of funding and progress toward simple-interest calculations. Availabili ty of adequate property insurance will continue to be a problem, but it’s solv able through a spirit of cooperation among insurers, dealers, manufacturers, lenders and service companies. The industry isn’t yet “out of the woods,” but it is headed in the right direction. A serious problem in manufactured housing has been some poor-quality homes, contributing to complaints, de linquencies, repossessions and loan losses. New building codes and other legislation are bringing about significant improvements in this area, however. T " High repossession ratios in 1974 an d 1975 h av e been one of the m ain disenchantm ents of m a n u f a c t u r e d housing to le n d ers." The Manufactured Housing Finan cial Services Association (MHFSA) conducted a lenders-experience survey and 57% of the respondents indicated a continuing interest in mobile-home paper. However, many expressed in terest in availability of programs guar anteeing unquestioned safety and satis factory yields. Yield always has been a principal concern of lenders. During the recent period of high, tight money, many lenders found it economically unsound to continue investing large sums in mobile-home paper, due to its unsatis factory return. Delinquency and repos session ratios were too high, so many lenders withdrew, even though ultimate losses—in most cases—were either low er than, or in line with, other install ment portfolios. 22 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis As lenders ceased buying paper, manufactured-housing production suf fered a proportionate decline: the in dustry lost more than 50% of its normal production, dealing a fatal blow to some elements. There’s a brighter picture at present, with interest rates declining. Uncer tainties of the money market, a reason for a great reluctance on the part of investors to “get back in,” has resulted in a “wait and see” attitude. Even if some are bold enough to venture back into the market, it undoubtedly will be with caution, rigid control on credit extension and with other safety factors. Further, the banking industry’s much-publicized problems and losses in areas other than manufactured hous ing are cause for tightened regulatory control, resulting in stricter credit poli cies by individual lenders. Will there be a tendency by investors to over-react? That’s possible if obtain ing funds continues to be difficult, even if interest rates remain at favor able levels. With an emphasis on safe ty, federal programs may be a partial answer to the future funding problems of the manufactured-housing industry, but only if the lending community isn’t too burdensome and if regulations deal ing with servicing, controlling and filing claims are reasonable. Yields must be satisfactory. Another development which may cre ate additional caution among lenders is the Federal Trade Commission’s revo cation of the holder-in-due-course doc trine, which essentially would permit consumer recourse to the lender in matters involving product warranties. Lenders are apt to be slow to finance products of uncertain quality or those sold by dealers of uncertain ability and/or disposition to perform satis factory warranty services. There is another finance considera tion. Robert L. Ernst, MHFSA presi dent, observed that the industry’s fu ture welfare lies in educating manu facturers, dealers and lenders on adop tion of a different financing program, a complete change to a simple-interest reducing-balance type calculation, as in residential mortgages. He indicated that escrow accounts should be set up to provide for payment of insurance pre miums and taxes. Mr. Ernst suggested up to 12 years for single-wide motor homes, 15 years for double-wides and 18 years for modulars with real estate. The dealers, he said, must learn that they must make profits on sales, not on reserves and participations. As long as manufactured housing is marketed through a manufacturerdealer-buyer-lender relationship, there will be a need for dealer-inventory financing (floor plan). Lenders usually avoid this type of lending, providing it only as a means of obtaining profitable, dealer-generated retail paper. If finance programs move in the direction of sim ple-interest calculations on the reducing balance, new and different methods of merchandising, with or without real estate, will be devised. Dealers will have less control over time sales and lenders will be less dependent on deal ers for profitable finance business and therefore less disposed to provision of inventory financing. Dealers will have to become better, more sophisticated merchants, better capitalized and mak ing profits on sales. High repossession ratios in 1974 and 1975 have been one of the main disenchantments of manufactured housing to lenders. A partial answer to that problem is revealed in the previously mentioned lenders-experience survey. The four most common reasons found for delinquency and repossession were marital problems, unemployment, overextension of credit and dissatisfaction with warranty service or with the home itself. The problem of overextended credit, "A s long as m a n u factu red housing is m a rk e te d through a m a n u fa c tu re r-d e a le r-b u y e r-le n d e r re la tio n s h ip , th e re w ill be a need fo r . . . flo o r p la n n in g ." dissatisfaction with warranty service or the home, lack of equity and a few of the others probably will be overcome. Marital problems and unemployment, the two greatest causes, can be mini mized, but can’t be eliminated. Repossession problems, the source of much lender dissatisfaction, can and probably will be corrected. This is a “plus” for the industry because the price of new housing is increasing steadily and is bound to go out of the reach of many buyers. As this occurs, the demand for less-expensive units will increase. Repossessions may fill this need. The current repossession situation is under control in virtually all areas. The experience gained by having had (C ontinued on p age 132) MID-CONTINENT BANKER for April, 1 976 is for Banking. T hat s your business, and we never forget it. That s why all the paperwork in our program is designed for quick and easy completion by loan officers, not underwriters. And we make sure you always have all the supplies you need. Free. B is also for Book. Ours is a thorough Reference Manual that details the entire Integon program of life and health coverage, contract limits, maximum terms, procedures for claims, refunds and reports, and samples of all charts, forms and certificates. Plus a bonus section to make selling easier for you. B is for Bread, too. And we know which side ours is buttered on. S o we never sign you up and then leave you hanging. Instead, the Integon representative works with you to get everything set up and running smoothly. Then he makes regular visits to keep things that way. And if you need him in-between times, just call. And he 11 make a beeline to your door. When a new loan officer joins your firm, our representative provides a complete training pres entation that helps your staff sell better. S o your bank can earn more. And finally, B is for Bottom Line. And we do everything possible to make sure yours is favorable. There s a lot more, and if you re interested, you should call J . Wayne Williard, Jr., collect at 919/ 725-7261. As Vice-President of Credit I nsurance, he’ll be happy to arrange an appointment at your convenience, without obligation. Or, if you don’t feel like talking, write him at Integon Life Insur ance Corporation, P O. Box 3199, Winston-Salem, N. C. 27102. Either way, once you get all the facts, we think you’ll agree that Integon’s Credit Insur ance program is not only pleasant and profitable. J . Wayne Williard, J r . , V ice-P resid en t But also easy as you-know-what. (^ IN T E G O N MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 • Mosler. Arthur Pisetzner has been appointed region general manager of the enlarged central sales region of Mosler, Hamilton, O. He will be head quartered in Lincolnwood, 111., and will be responsible for sales, installation and service of Mosler equipment in an area including Illinois and Indiana. He will be assisted by Ford Campbell, region sales manager. Mr. Pisetzner previously was regional manager of Mosler’s New York sales area. PISETZNER CAMPBELL • Amiel Industries. Robert A. Pfei fer has been named senior sales repre sentative for the southern division of Amiel Industries of North America, At lanta. Mr. Pfeifer will be headquartered in Nashville. He goes to Amiel from General Communications & Electronics and previously was' with Unimar Corp. and Mosler Safe Co. Corporate News Roundup Insurance. Mr. Impey, along with the other board members, will work with the department on an advisory basis on all phases of insurance. At Financial Insurance Service, Inc., Mr. Impey su pervises production of insurance pro grams for commercial banks in Missouri and Illinois. • Continental Mortgage Insurance, Inc. Stephen E. Otstott has been named manager of the new Kansas City branch underwriting office of Con tinental Mortgage Insurance, Inc., sub sidiary of CMI Investment Corp., Mad ison, Wis. The office will serve lending institutions in Missouri and Kansas. Mr. Otstott previously was an underwriter in Continental’s Dallas regional under writing office. • Financial Insurance Service, Inc. Jack W. Impey, senior vice president, Financial Insurance Service, Inc., Des Plaines, 111., has been appointed by Governor Daniel Walker to the state advisory board of the Department of New Products and Services • Automation Forms Co., Inc. Products for use in the bank operations area are available from Automation Forms Co., Inc., Garland, Tex. The firm’s correction fluid, correction labels and document carriers may be used to correct key stroke errors at check en coding machines, while Automation Forms’ document carriers may be used to repair and reenter reader-sorter re ject items and make torn or mutilated documents machinable prior to sorting. A sample reject/correction repair kit containing these three products may be 24 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IM P E Y obtained free. Write: Automation Forms Co., Inc., P.O. Box 1706, Gar land, T X 75040. • Diebold, Inc. The Visual Auto Teller VI is the new member of the line of drive-up machines from Die bold, Inc., Canton, O. Transaction ser vice is done by way of pneumatic tubes. The transaction carrier is of clear plastic, giving full visibility of its This is new D ie b o ld fe a tu r e s p la s tic c a rrie r V is u a l p n e u m a tic and A u to T e lle r o p e ra tio n , o ff-c o u n te r t e lle r MILLER • James Talcott, Inc. Brooke Grant has been elected chairman and presi dent of Talcott National Corp., financ ing and factoring subsidiary of James Talcott, Inc. Mr. Grant succeeds James C. Slaughter, the former chairman, and Harvey M. Kelsey Jr., the former presi dent, both of whom resigned to accept positions elsewhere. Three new direc tors of Talcott National have been elected: David M. Kennedy, former U. S. Treasury Secretary and former chairman of Continental Illinois Na tional, Chicago; Franklin D. Johnson, partner, Jardine, Johnson & Baldwin law firm, Salt Lake City; and Glendon E. Johnson, chairman and CEO, Amer ican National Financial Corp., Galves ton, Tex. All four are principal share holders of Uintah National Corp., a Utah-based investment group which has purchased 53% of the Talcott Na tional common stock. • John H. Harland Co. Dan Miller has been named sales representative for Kansas City and surrounding areas by John H. Harland Co., Atlanta. Mr. Miller will serve banks being supplied from Harland’s St. Louis plant. OTSTOTT w h ic h GRANT V I, cle a r con trols. contents and the unit features a twoway audio system and controls that are located in an off-the-counter console. For multiple installations, the Visual Auto Teller VI transaction carriers and customer service units have color-coded panels. The customer units can be se cured with key-locking tambour covers during nonbusiness hours. Write: Die bold, Inc., Canton, OH 44711. • Mosler. To stimulate safe-depositbox rentals, a new promotional kit is being offered by Mosler, Hamilton, O. The kit contains 16 different statement stuffers that can be imprinted with the bank’s name, an easel card for counter display, 30- and 60-second radio com mercial copy, newspaper ad mats and duplicate personal inventory records. In addition, Mosler is offering a free standing lobby display which holds four safe-deposit-box tins. Write: Mosler Safe Co., Department PR-042, 1561 Grand Boulevard, Hamilton, OH 45012. EXCLUSIVE “FINE ARTS” TRAY/PLAQUES All beautiful full co lo r authentic reproductions A LOW COST - HIGH QUALITY - HIGH POWER - INCENTIVE AND PUBLIC-RELATIONS TOOL CURRIER & IVES “ W IN TER” A CHRISTMAS CLUB WINNER! D ram atically successful in a ll areas of the USA . M em berships increased by 200% and m ore! Letters available confirm ing above BICENTENNIAL SERIES FOR YEAR-ROUND PROMOTION U n iq u e o p p o r tu n ity to h e lp y o u r c o m m u n ity B ic e n te n n ia l-w is e and y o u r s e lv e s g oo d p u b lic re la tio n s w ise, a t little o r n o co st. W rite for details and exclu sive A “TRAY IS A TRAY IS A TRAY” JUST IS NOT SO! There are trays of all kinds, cheap, intermediate and good, most of ordinary run designs and quality reproduction, all generally sold retail, many discounted. “ FINE ARTS” trays are created for promotion use only, NONE SOLD IN STORES ANYWHERE! A truly “ exclusive” incentive and public-relations item of the Highest Quality Authentic Full Color Reproductions of Originals, WITH HIGH BLIND VALUE IMPRESSION! THE BEST VALUE FOR YOUR PROMOTION DOLLAR COMPARED WITH OTHER TRAYS AND OTHER ITEMS “ Believe it or not”—a woman can have a dozen trays at home, she’ll want and go out of her way for still another one IF UNIQUELY DIFFERENT AND BEAUTIFUL. Our “ Fine Arts” trays are just that, particularly in our unusual and lovely Oval shape and richly reproduced designs NOT SEEN IN STORES ANYWHERE, a real “impulse desired” item. Write for exclusive in your trading area. Send $1.00 to cover postage and handling tor free tray. FABCRAFT, INC. “The Tray People,” Frenchtown, N.J. 08825 MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Is your teller ignoring an $80,000 customer? You are very attentive to a good customer when he comes to you for a $50,000 mortgage, a $20,000 secured loan and a $10,000 home improvement loan. But when he comes to buy travelers cheques, does your teller sell him just an ordinary brand? Carrying the right Travelers Cheque is a very important part of travel. So when one of your good customers asks for Travelers Cheques, the only brand of Travelers Cheques your teller should recommend is American Express" Travelers Cheques. They are not an ordinary brand of Travelers Cheques. They offer your important customers decided advantages. Am erican Express Travelers Cheques are good at more hotels, restaurants, shops and gas stations across Am erica than any other travelers cheques. Am erican Express Travelers Cheques are supported across Am erica by an “Emergency Refund”5" system that never closes.* Never. (O ther travelers cheques refund systems can be closed as many as 120 days a year.) Am erican Express Travelers Cheques are supported by over 650 travel offices around the world. T h e other two major travelers cheques aren’t backed by any travel offices. If your tellers are not aware of the advantages of Am erican Express Travelers Cheques they should be. And they can be. W ith your help. Simply cut out the box on this page marked A ttention Tellers and send it to your head teller for distribution. It could help you to keep your best customer your best customer. • American Express Travelers Cheques are good at thousands of hotels, restaurants, gas stations and shops across America where other travelers cheques aren’t. • American Express Travelers Cheques are the only Travelers Cheques backed by a refund system that never closes. • American Express Travelers Cheques are supported by over 650 travel offices around the world. • Last year more travelers used American Express Travelers Cheques than any other. They are the world’s leading Travelers Cheques. American Express Travelers Cheques can provide your customers extra service. Emergency refunds of up to $100 at night, on weekends and holidays. Am erican Express Travelers Cheques American Express Company https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis **■ f iv e wavs . o u r Q F system can in c re a s e your bank's p ro fita b ility and goodwill i f y o u have only a few b ran ch es and some to u g h com petition. It is a management tool whose data can be computer-summarized in a host of invaluable ways, helping you to identify optimal new branch locations, evaluate the profitability of individuals as well as sociographic groups, and prepare for debit card introduction and growth. And it increases your responsiveness to any customer’s personal banking needs. For in stance, since your best prospects for a new service are existing cus tomers, let Cl F spotlight the real candidates for you, saving a variety of costs and avoiding possible loss of hard-won goodwill. It uncomplicates your life, shrinking paperwork and credit searches to an absolute minimum, saving money all over the place, speeding up service and wrapping up new business. It tells you everything —status of demand deposit and savings accounts, installment loans and interbank card activity—no matter how a file is accessed. That much information is often all it takes to authorize a new service, instantly. It reduces your credit risk by giving you a complete profile in seconds of all the account relationships any customer maintains with your bank; change information needs to be entered only once, eliminating duplicate transaction processing. There are a lot more ways our CIF system can begin accelerating your growth in less than a year for a very nominal cost. Why not call Gib W itter or Bill Korengel collect at [513] 852-5492 for the whole Central Trust CIF story? We already have more than one-half million accounts and a growing number of very happy participants in our Central Information File. We have no doubts about its ability to be doing some big things for your bank, too. ▼TH E CENTRAL TRUST COMPANY Na THE CONVENIENCE BANK Central Trust Tower, Fourth and Vine Streets Cincinnati, Ohio 45201 28 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I MCMBtR: .The ■Central Bancorooratlon CINCINNATI, OHIO MID-CONTINENT BANKER for April, 1976 EFTS: W h a ts Happening Today W ill Shape Tomorrow By J. REX DUWE* President American Bankers Assn. ACH bank in the United States has entered the world of electronic funds transfers, or will soon do so. No banker realistically can say, “Count me out.” One example proves the point: direct deposit of social security checks. The government is cutting the costs of pro cessing and delivering recurring social security and supplemental security checks by using an electronic process— namely automated clearing houses (ACH s). W e’ll all be participants in this process, whether we receive com puter tapes, punch cards or printouts. W e’re all involved in E F T . I’d like to review some recent E F T events that will shape the E F T environ ment for tomorrow. True, these events have been reported in the trade press and on the business pages of our news papers, but, by my bringing this infor mation together, we may gain a new perspective on the evolving system and may be better able to make E F T de cisions. W e may be better prepared to answer the questions of when and how our banks will use electronic transfers. Any E F T news roundup gravitates toward the interpretive ruling on Cus tomer-Bank Communications Terminals (C BC Ts) issued by Comptroller of the Currency James Smith in late 1974. The Comptroller said that CBCTs do not constitute bank branches. This con troversial statement proved a boon to the legal profession by generating many lawsuits. E # Mr. Duwe is chairman and president, Farmers State, Lucas, Kan. Last October, the Comptroller sus pended his ruling after several courts had held that his CBCT interpretation violated, at least in part, the McFadden Act. But this did not mean an end to CBCTs. It did mean that a decision to use these terminals had to be made by individual banks acting on the basis of internal business decisions and on the advice of their own counsels. Some banks have chosen to use CBCTs and have been taken to court. Most of the court decisions have stated that, in one way or another, CBCTs are branches. But, in a first-of-its kind de cision on January 2 of this year, a U. S. District Court in Oklahoma ruled in support of the Comptroller’s contention that CBCTs are not bank branches. As a sidelight, this is the only CBCT case so far in which witnesses have testified. Other decisions have been rendered solely on the basis of legal briefs. What will be the final chapter in the CBCT story? It seems fairly certain that the whole CBCT question eventually will wind up in the Supreme Court. At any rate, that’s the prediction of the Comptroller’s office and the consensus among many other knowledgeable peo ple. However, there’s a larger question that should be asked: Should the na tion’s decision about CBCTs rest en tirely on legal arguments concerning whether these devices are bank branches? In an article in the December issue of Banking magazine, Blair Schick of Arthur D. Little, Inc., stated that the MID-CONTINENT BANKER for April, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis law has defined the debate on CBCTs and that “W e argue whether E F T fa cilities are branches only because the statutes are so written as to allow no other questions to be asked.” Mr. Schick says, “The better course is to turn the process around. The law should be de fined by a debate on E F T , not a de bate on what ‘branch’ means.” What is the ABA’s position on CBCTs? We believe that CBCTs are a new device for delivering traditional bank services—not in changing those services—and that they should be al lowed. Bank-branching laws, by defi nition, affect only banks. If we alone are blocked from installing electronic terminals, our competitors would gain an unfair advantage. CBCT rulings don’t affect thrifts, and they certainly don’t affect Penney’s, Sears and Mont gomery Ward. But these retailers are our financial competitors, too. Right now, they’re offering a tremendous amount of credit to our mutual cus tomers. These retail outlets are install ing computerized “cash registers” that could easily be used to accept the equivalent of deposits. While remembering that our com petition isn’t limited to thrifts, let’s look at some of the recent E F T develop ments involving them. First, the Federal Home Loan Bank Board has said it will continue to au thorize “experimental” remote service units (RSU s) for federal thrifts until July 31, 1976. This is an extension of the previous deadline. From the con sumer’s point of view, a CBCT and RSU are identical. From our point of 29 view as bankers, federal S&Ls are being granted specific authority to operate these units while national banks have been stymied by legal actions and are not able to get the same explicit goahead. This is unfair. It means federal S&Ls have an unfair advantage. A second important question involves thrifts, banks and E F T centers on di rect access to automated clearing houses. In June, the Federal Reserve pro posed that Fed-member banks and other financial institutions “authorized to maintain demand-deposit accounts” have the right to direct origination of ACH entries at all Fed-operated ACH facilities. At the same time, the Fed suggested direct delivery to any institu tion that had a “sufficient” volume of transactions and that was on an existing Fed courier route. In November, the Justice Department recommended that the Fed revamp its proposal. Justice suggested that the Fed establish fees for all ACH services and offer partici pation on a nondiscriminatory basis to all financial institutions. The ABA ex pressed concern that the Justice D e partment had misunderstood both the statutory powers of financial institutions and the way ACH access actually would work under the Fed proposal. The ABA consistently has maintained that origination of entries through the automated clearing house system should be limited to institutions having de mand-deposit powers. In January of this year, the Federal Reserve Board announced an interim policy for the deposit and delivery of payments on magnetic tape cleared through its facilities. The change per mits ACH organizations to allow thrifts direct access to Fed-operated ACHs if, and this is important, if the thrifts are members of an ACH. Es sentially, the burden of decision as to who gets direct access to ACHs rests, then, with bank-dominated ACH as sociations, and several of these associa tions have voted thrifts membership and, therefore, direct access. ACHs in New York, New England, Michigan, Philadelphia and Pittsburgh already have agreed to admit thrift institutions to full and equal membership. Thrifts also seem to be making head way in another area. In Chicago, com mercial banks are competing with one another in selling point-of-sale (POS) services to S&Fs. Continental Illinois National has announced an agreement to establish an E F T computer linkup with the Federal Home Foan Bank of Chicago. The tie-in, scheduled for op eration this summer, will allow S&Ls that use FH LB data processing services to participate in the 200-terminal POS system Continental plans to operate in two major Chicago retail chains. 30 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Meanwhile, Continental’s major ban k competitor, First National of Chicago, recently signed the city’s three largest S&Ls for participation in its new E F T package, known as the “YES” System. Again, remote terminals will be shared. Ironically, Illinois S&Ls sharing in POS networks now have a competitive advantage over banks. S&L customers can make both deposits and withdraw als at remote terminals, while bank cus tomers are permitted to make only withdrawals. This court ruling is being appealed by Continental and FNB of Chicago. One final note about thrifts and elec tronic funds transfers. This year, the Federal Home Loan Bank took pre liminary steps toward an FHLB-operated POS-related switching system. The FH LBs invited computer hardware and software vendors to submit proposals for the design and development of such switching systems. In early September, the Federal Home Loan Bank of San Francisco an nounced it would operate a pilot E F T Spotlighting 'Never-Close' Bank Isn’t it a good thing your bank never closes? Your bank is National City. H e re 's M a r io n , an in te re s tin g O ., used ad to N a tio n a l p u b lic iz e C ity its B a n k, a u to m a te d te lle r m a c h in e , calle d "T h e B a n k -K e y 2 4 ." The a d fe a tu r e d th re e d iffe r e n t s itu a tio n s in w h ic h h a v in g access to th e b a n k 's A T M w as an ad v a n ta g e : The w o m a n a t le ft just re m e m b e re d , at 10 o 'clock at n ig h t, t h a t a lo an paym ent w a s d u e t h a t d a y ; th e m a n in th e cen ter n e e d ed a s a fe p la c e to p u t th e $ 2 5 0 re c e iv e d , a t 6 old tru ck; p ic k u p needed e x tra o'clock S a tu rd a y and m oney th e at 3 he h a d just n ig h t, fo r cou ple at o 'clock an rig h t S u n d ay a fte rn o o n to o b ta in " th e b u y o f a lif e t im e " a t a ya rd s ale. The p ic tu re a t th e b o tto m ad sh o w s at th e a ll b a n k 's th re e ATM, s itu a tio n s bein g w hose services d is p e n s in g m o n e y a n d ta k in g d ep osits. o f th e reso lved in clu d e switch that would permit members to share remote service units in retail es tablishments. The San Francisco pro gram was described as the potential forerunner of a nationwide switch and settlement center for thrift institutions. But the Justice Department took ex ception to the proposal, saying, “There is no demonstrable need for the Home Loan banks to enter the E F T S field” and that government operation could lead to a “regulated public utility ap proach.” The San Francisco project has been postponed, at least for the time being. Nonetheless, we must recognize that the FH LB has acted as an advocate for the S&L industry, and sometimes that has meant advocating EFT-related powers. Turning from thrifts, let me briefly mention a few other E F T develop ments. First, both major bank card com panies are interested in debit cards. About six months ago, National BankAmericard, Inc., announced plans for a nationwide debit-card plan. Inter bank Card Association— the Master Charge company—is proposing its own debit-card program to its members. We should keep up to date on these pro grams. Moreover, individual banks and groups of banks are preparing to offer similar services. As you know, Financial Communications Services Corp., oper ating in Missouri and surrounding states, now has 150 banks participating in its proposed debit-card program. This number is growing every day. Second, Hempstead Bank, on Long Island, has reactivated its program for POS electronic fund transfers. If you’ll remember, Hempstead was an inno vator in POS, offering the service from November 1, 1971, to December 31, 1972. Now Hempstead has decided that it’s time to reinstitute POS operations and will install terminals in the stores of 35 merchants in six communities. Going international for a moment, bankers may be wondering what’s hap pening with SW IFT —the Society for Worldwide Interbank Financial Tele communications. Since its inception in 1970, this group of banks has been planning a sophisticated system of in ternational payments and a network for message transfers. Initial operations of the system, developed privately by 300 banks in 13 European countries, Can ada and the U. S., had been planned for June. But the start-up will be de layed by at least four months. At any rate, SW IFT is on the way. With all this E F T activity, what role has the ABA played? Actually, we’ve played several roles. W e’ve testified be(Continued on p ag e 97) MID-CONTINENT BANKER for April, 1976 LEFT: W ebe w a tc h e s th ro u g h accounts, as H. N a u n h e im G e o rg e W. (I.), its pac es. T e rm in a l and p ro v id e s ch., Reeves, C h a rte r a .v .p ., serves fo r im m e d ia te B ank puts d a ta access of v id e o e n tr y , to O v e r la n d , d is p la y e s p e c ia lly c o m p le te M o ., te r m in a l of new m a s te r file . R IG H T: H a rr y W . A d a m s Jr. (r.), s .v .p ., C h a rte r B a n k o f Jen n in g s, M o ., is su p e rv is o r o f C e n tu ry 201 system t h a t serves C h a r te r Banks in St. Louis a r e a . Tellers Have Complete Customer Information At Fingertips W ith New Terminal System HALES, the Greek philosopher, gave this advice: “Know thyself.” But a bank is even better advised to know its customers. And the six St. Louis-area institutions of First National Charter Corp., Kansas City-based HC, now have the capability of knowing virtually everything a bank wants to know about each of its customers— immediately, via terminal inquiry. For example, every teller in the two facilities of Charter Bank of Jennings, the three facilities of Charter Bank of Overland, or, in part, at Webster Groves Trust, is on-line via a terminal for memo posting and inquiry into each bank’s complete customer master file, within security limits. The data are stored on a Century 201 system at Charter Bank of Jennings and available through a customer integrated refer ence file (C I/R F) developed coopera tively by NCR and the ED P Corp. of Florida. “W e believe we have achieved, with the CI/RF, the informational goals banks have been seeking since the customer information file concept was first advanced,” said Harry W. Adams Jr., senior vice president of Charter Bank of Jennings. “We now have, for the first time, a complete, immediate display of the entire data base, includ ing all types of accounts, activity, his tory, special instructions, demographics and the like. “This enables us to upgrade cus tomer service and customer relations to a level never before possible.” To illustrate: The system advises the teller if she can cash a check for a specific amount on an account and im mediately reduces the available balance by the amount of that transaction via memo posting. If there are not sufficient funds in the account, the terminal in forms the teller the date and the amount of the last deposit, available balance, whether there are any holds on the account plus the account num ber and balance of every other deposit account the customer has with the bank —without the teller even requesting this information. Thus, the teller can courteously suggest to the customer that he or she transfer funds to cover the check. Stops and holds can also be placed through any terminal in any of the banks’ facilities. When a customer asks the bank to place a stop on an account, the system advises immediately if a check for the same amount has been paid since the last statement, via a thermal printer or a data display tube. If a customer wants to pay off a loan, the printer or the data display unit shows the net payoff amount. The MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis teller accepts this and the system makes all adjusting entries through the general ledger. Further, a loan officer at one of the Overland or Jennings facilities can get a complete customer profile through a small thermal printer. The profile in cludes detailed data on all demand de posit and savings accounts, with cur rent balances and average balances for the previous year; the number of de mand deposit overdrafts and NSFs; aggregate balances for past years, and the number of years; a listing of CDs; a complete history of past accounts, such as an installment loan paid off in 1971, and payment performance; date of first business with the bank; special instructions; c o m p le te demographic data, etc. Upon request, the thermo printer can produce instantly an in tegrated, itemized statement of all ac counts of an individual customer, with every transaction since the last regu larly issued statement detailed thereon. Security restrictions govern the avail ability-through-terminal of this com plete data base, of course. And the flexible system permits each Charter Bank to set up its own security and override codes. Typically, data on ac counts considered confidential is dis played only at specified terminals, along with the words “confidential in- 31 "The g re a te s t v a lu e o f th e n e w system is not in h a rd w a re fe a tu re s , . . . b u t in the com pleteness an d im m ed iac y o f the k n o w le d g e it m akes a v a ila b le on a ll o f our custom ers . . " formation.” At the Charter Banks of Jennings and Overland, applications on-line since last spring include demand deposit, regular savings, CDs, installment loans, Christmas club and “golden” savings— a commitment savings account. Webster Groves Trust began convert ing to CI/RF at the end of July and now has on-line demand deposit and savings; general ledger is also auto mated. All systems design, programing and actual conversion of these banks has been handled under Mr. Adams’ direction. Soon to be added to the system are the two facilities of Ameri can Bank, DeSoto, Mo., another Charter Bank 65 miles from St. Louis, and the recently acquired Bank of Ladue. There are 17 Charter Banks in Mis souri, and total assets of First National Charter Corp. are nearly $1.2 billion. The flagship bank of the HC is First National, Kansas City, which performs a key role in the Charter family of banks. It provided the original corpo rate management when the HC was formed and continues to be a source of expertise in many fields, including spe cialized lending, trust services, invest ments and data processing. Generally, processing for the western half of Missouri, where some threefourths of the Charter Banks are lo cated, is handled on a large computer at First of Kansas City. That system processes data for numerous outside banks, too. A few Charter Banks still have their own small systems, and Charter Bank of Jennings serves the three banks mentioned, with the Cen tury 201 system. It replaces equipment that served the Jennings and Overland facilities. However, the old system pro vided access just to limited information and only via the computer’s printer. This meant 24-hour delays in most cases. In 1973, a six-man committee from First National Charter Corp. traveled around the country looking at data processing systems, equipment and programs. The committee recommend ed to management establishment of a CI/RF, among other things. The initial thinking was that this would be based in the large Kansas City system. How ever, a CI/RF is a logical outgrowth of a C IF, which the western operation 32 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lacked. Consequently, the Jennings op eration was expanded and upgraded to the Century 201 over one weekend without programing changes, thanks to the “upward compatibility” of the systems. First National is now working on a CI/RF approach, too, using an IBM system. Savings and demand accounts there have been placed on-line for inquiry through video display termi nals. On-line teller terminals and cathode-ray tubes are operating at First National’s main bank, its Loma Vista Branch and at Leawood National, an affiliate of First National Charter. In the meantime, the new system at Charter Bank of Jennings has the po tential to handle other Charter Banks and/or processing for outside banks. At least two could be added, and more with the installation of additional memory. At present the Jennings, Overland and Webster Groves facilities have 52 teller terminals, 11 video display termi nals for inquiry and/or data entry, particularly of new accounts; and eight thermal printers. Despite the number of terminals, the system services each bank with just one phone line, regard less of the number of facilities, via a multiplexor in the computer room. “We selected the NCR 279 teller terminals for a variety of reasons,” said Mr. Adams. “Because their cost is low, we can afford one for each teller, op timizing customer service. Also, these are universal terminals, which handle all our transactions. And they are allelectronic, except for the printer. So they are fast and quiet, with little to go wrong. W e have experienced mini mum downtime.” Although the 279 is not an “intelli gent” terminal, it does maintain totals electronically. If line problems are en countered, for instance, the terminals can continue to operate off-line. “The greatest value of the new sys tem is not in hardware features, though,” Mr. Adams declared, “but in the completeness and immediacy of the knowledge it makes available on all of our customers—simply because this knowledge now enables the Char ter Banks to serve these customers better than they have ever been able to in the past.” * * EFT Network to Be Shared By Chicago Bank, S&Ls And Linked to Milwaukee C H IC A G O—F if ty-six area S&Ls have filed applications with the Fed eral Home Loan Bank Board to share the electronic network of Continental Illinois National. The terminals are located at 199 National Food stores and Dominick’s Finer Foods locations. Pioneer Bank, Chicago, has become the fourth bank to contract for direct participation in Continental Bank’s electronic banking network at Domi nick’s. Continental has had the system in use for more than one year. When the S&Ls begin participating in it some time in mid-1976, their customers will be able to make savings-account de posits and withdrawals and cash checks at any terminal. Bank customers are prohibited by regulation from using the machines for deposits. The S&Ls have signed initial agree ments to participate in the network, while three of Continental’s correspon dent banks—Avenue Bank, Oak Park, and Glenview State and National Se curity Bank, both of Chicago—have signed contracts to share in it. Under FH L B regulations, federal S&Ls were given until February 29 to file applications in Washington for in stallation or sharing of the remote service units (R SU s). The terminals would be categorized as RSUs once the S&L customers began using them. The 56 S&Ls will share Continental’s network under agreements the bank has signed to provide computer linkage between its electronic terminals at the supermarkets and those that handle data processing for the S&Ls, such as the Federal Home Loan Bank of Chicago. Continental also is developing switches between itself and participat ing S&Ls handling their own process ing. During the third quarter of this year, Continental Bank plans to establish a computer link with Milwaukee Midland National, enabling the latter bank’s cus tomers and customers of 48 S&Ls in Illinois and Wisconsin for whom Mid land handles data processing to share Continental Bank’s electronic network at National Foods and Dominick’s su permarkets in the Chicago area. This computer link is said to be the first interstate link in the Midwest. MID-CONTINENT BANKER for April, 1976 AUTOMATED CLEARING HOUSES — with them, banks can cross bridge from paper-based system to EFTS RE BANKS headed for the same paper problem that smothered the brokerage industry in 1968? Can banks physically continue to handle the grow ing volume of checks (about 25 billion a year, with that figure projected to rise to 44 billion a year by 1980)? Will they be able to hire the additional peo ple needed for the job of processing these checks? An ABA survey in 1968 suggested that the time eventually would come when checking-account service charges might have to be raised By ROSEMARY McKELVEY Managing Editor A and the banking industry would have a shortage of qualified personnel for check-processing operations. Will banks be able to go on absorb ing the massive expenditures for paper, energy and transportation needed to keep payment-exchange mechanisms in good running conditions? The answer, obviously, is, “Of course not.” That’s why the subject of elec MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tronic funds transfer systems (E F T S ) is the hottest topic in banking today. E F T S is an umbrella term that covers all electronically recorded exchanges of money. Put simply, E F T S are com puterized systems that replace cumber some paper work with fast, efficient records of transactions on magnetic tape. The technological advances that pro duced E F T S began in 1948 with the invention of the transistor and were followed closely by the development of integrated circuits. These two electronic devices are looked on as primary in fluences in today’s electronic revolution. Miniaturization and savings in power have made it possible for electronic circuits to be packaged in increasingly smaller spaces. In the past few years, the financial world has seen development of various E F T systems, each with its own acro nym or initial identification. These in clude ATMs (automated teller ma chines), POS (point-of-sale) terminals, CBCTs (customer-bank communica tions terminals) and RSUs (remote service units)— all directed toward cus tomer/bank or customer/retailer rela tionships. There’s still another component of an electronic funds transfer or payment system—the automated clearing house (A CH ). It’s different from ATMs, POS terminals, CBCTs and RSUs in that ACHs are being developed primarily to simplify and expedite financial transac tions between banks, between banks and clearing houses, between banks and the Federal Reserve System and be tween banks and their large-employer customers. ACHs are ban k oriented, while the other E F T systems are cus tom er oriented. An ACH system can act as a neutral interconnection between banks and provide banks with the fundamental capability for shifting from a paperbased to an electronic system and one, incidentally, that enables banks to offer a wide variety of electronic services to their customers. Development of the ACH system fol lowed a two-year study by the ABA’s Monetary and Payments System Plan ning Committee. The latter, in 1971, announced that the study showed that Figure 1 SYSTEM PARTICIPANTS N o te 1: O r ig in a tin g c o rre s p o n d e n t b a n k s t h a t re c e iv e p a p e rle s s en trie s fro m a n d choose to d e a l w ith A C H th ro u g h o r ig in a tin g the banking industry should work on establishing a clearing and distribution system for electronic payments and recommended that this be done region ally by banks in local areas and, logi cally, through their clearing house as sociations. The ACH concept actually had its beginning in California in a project called SCOPE (Special Committee on Paperless Entries). Other ACH testing efforts were carried out by Atlanta’s COPE (Committee on Paperless En tries ). on m a g n e tic ta p e on o n ly one fo o t o f m a g n e tic t a p e . M id -A m e r ic a in fo rm a tio n P a y m e n t E x ch an g e https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis firm h e re in p a y m e n t cycle. Figures 1, 2 a n d 3 , sh o w n h e re a n d on o p p o s ite p a g e , a r e re p ro d u c e d U n d e r A C H system , fu n d s tra n s fe rs a r e re co rd e d o f t a p e a n d th u s can c o n ta in lo c a te d fro m b o o k le t p r e p a re d b y H o uston C H A , n o w m e rg e d w ith S o u th w e s te rn A C H . reels lik e one s h o w n here. P ictured a r e 6 4 0 checks, w h ic h re p re s e n t n u m b e r o f tra n s a c tio n s th a t can be re co rd e d b an k a re fro m Each 1 ,5 3 6 ,0 0 0 ( M A C H A ), St. Lou is-b ase d re e l holds 2 ,4 0 0 checks. ACH. Photo fe e t cou rtesy As now constructed, the ACH system involves five key participants: 1. T he custom er or em p loy ee is the individual who authorizes the paperless entries. In a direct-deposit system, the employee gives his employer the au thority to initiate a credit entry auto matically to his bank account at a receiving bank each payday. For pre authorized debits, the customer au thorizes a billing company to intro duce a debit entry into the banking system to pay his bill. 2. T h e com pany or em ployer is the business entity that introduces paper less entries into the banking system. As an employer, a firm produces credits to pay employees. As a billing firm, a company creates debit entries for cus tomers who have authorized this form of bill payment. A bank with data processing capability or access to data processing facilities could create the paperless entries for its customers. 3. T h e originating ban k receives paperless credits and/or debits from participating firms and forwards the entries to the central clearing facility. Originating banks also must agree to act as receiving banks (see No. 4 ). Banks that choose to introduce paper less entries for a customer company to the ACH through other banks are re ferred to as originating correspondent banks. 4. T he receivin g ban k receives pa perless entries from the ACH and posts them to its depositors’ accounts. Banks without data processing capabilities Figure 2 Figure 3 ILLUSTRATION OF CREDIT TRANSACTION ILLUSTRATION OF DEBIT TRANSACTION DIRECT DEPOSIT OF PAYROLL BILL PAYMENT FIG U RE 2: (1 ) E m p lo y e e g iv e s a u th o r iz a tio n f o r c re d it e n trie s . (2 ) Em p a n y p re p a re s m a g n e tic t a p e fo r its d e p o s it a n d p lo y e r accounts a n d p re p a re s m a g n e tic ta p e of p a y ro ll en trie s and d e liv e rs to his b a n k . (3 ) O rig in a tin g (e m p lo y e r's ) b a n k b a la n c e s e n trie s to co n tro l s u b m itte d by e m p lo y e r , e x tra c ts e n trie s fo r e m p lo y e e s who a re de b a la n c e s d e liv e rs to en trie s to his b a n k . co n tro l to ta ls (3 ) s u b m itte d w h o a r e d e p o s ito rs o f b a n k , th e n t a p e o f en trie s f o r e m p lo y e e s w h o b a n k s a n d d e liv e rs to A C H . (4 ) A C H to A C H . (4 ) A C H fo r r o u tin g receives ta p e s , sorts e n trie s a n d to e m p lo y e e banks, m akes c re a te s n e w s e ttle m e n t o f en trie s ta p e s and de liv e rs ta p e s to e m p lo y e e 's b a n k . (5 ) R e ceiving (e m p lo y e e 's ) b a n k b a l ances a n d v a lid a te s t a p e e n trie s , credits p a y to e m p lo y e e 's account a n d describes pay e n tr y to accom pany next bank s ta te m e n t. FIGURE 3: (1 ) C u s to m e r g iv e s a u th o r iz a tio n to c o m p a n y f o r d e b it en trie s. (2 ) C o m - https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (c o m p a n y 's ) com pany bank d e p o s it, p rodu ces ta p e o f e n trie s fo r o th e r receives ta p e s , sorts e n trie s a n d c reates n e w t a p e f o r r o u tin g to custom er's b a n k , m a k e s s e ttle m e n t o f en trie s a n d d e liv e rs ta p e s to custom er's b a n k . (5 ) R eceiving (cu sto m er's) b a n k b a la n c e s a n d v a lid a te s t a p e e n trie s , posts d e b it en trie s to cus to m e r accounts a n d describes c h a rg es w ith n e x t b a n k s ta te m e n t. N o te : If p a y m e n t is v a r ia b le a m o u n t, com pany g e n e r a lly w ill be to n o tify custom er b e fo re processing d e b it e n try th ro u g h A C H may participate in the ACH by receiv transactions to non-New York City par ing paper advices instead of magnetic ticipants via the Fed courier system. ACH paperless entries are divided tape or punched cards. 5. T he ACH is the central clearing into two categories: credits and debits. The most widespread use of elec facility that receives paperless entries from originating banks, distributes the tronic credit is direct deposit of pay entries to appropriate receiving banks rolls. Here’s how it works: The employee gives his employer au and performs the settlement function thorization for credit entries. The em for ACH-member banks. There now are about 36 ACHs ployer prepares magnetic tape of pay across the country, either operational or in the planning stages. More will be developed in the future. Most of the ACH Meeting May 12-14 paperless entries that these ACHs are The future of the automated clear handling or will handle are or will be ing house movement will be exam processed on IBM equipment owned ined in detail May 12-14, when the and operated by the Federal Reserve National Automated Clearing House banks in their respective areas. For Association (NACHA) holds a Con instance, the Mid-America Payment ference on the Future at the Atlanta Exchange (M A PEX ), headquartered in Hilton Hotel. St. Louis, will send its items through The conference will be devoted the St. Louis Fed. The Mid-America totally to ACH problems and oppor tunities. According to William O. Clearing House Association (MACHA), Anderson, chairman, NACHA Edu located in Kansas City, will work cation/ Communications Committee, through the K. C. Fed. “We will try to anticipate the future However, some ACHs will operate in terms of marketing, the continu independently of the Fed. The New ously changing legal and regulatory York ACH (NYACH), which opened environment, operations and the ag for business in mid-December, has be gressive movements of the thrift in dustry toward a more vigorous role come the first ACH to do so. It’s shar in the pre-authorized payments sec ing a Burroughs B/6700 computer sys tor.” Mr. Anderson is sr. v.p., Ohio tem with the Clearing House Interbank Nat’l, Columbus. Payments System (C H IP S). The latter, For more information, write: in operation since 1970, is used to clear Sharon Humphries, NACHA Con single-message, high-value, m o n ey ference Coordinator, American Bank ers Association, 1120 Connecticut market-type transfers among 62 partici Avenue, N. W., Washington, DC pating institutions in New York City. 20036. Although NYACH is operated without Fed help, it does expect to distribute MID-CONTINENT BANKER for April, 1 9 7 6 w ith cred its c o m p a n y account a n d e x tra c ts e n trie s f o r p o s tin g to custom ers p o s ito rs o f b a n k a n d d e b its e m p lo y e r's p a y ro ll acc o u n t, th e n p ro d u ces b a n k a t o th e r b a n k s a n d d e liv e rs c h a rg es to custom er O r ig in a tin g re q u ire d system . roll entries and delivers it to his bank. The originating (employer’s) bank bal ances the entries to the control sub mitted by the employer, extracts entries for employees who are depositors of the bank and debits the employer’s pay roll account. The originating bank pro duces a tape of entries for employees who are customers of other banks and delivers it to the local ACH. The ACH receives tapes, sorts entries and creates new tapes for routing to employee banks, makes settlement of entries and delivers tapes to employee banks. The receiving (employee’s) bank balances and validates tape en tries, credits pay to the employee’s ac count and describes the pay entry to accompany the next bank statement. Without the ACH’s part in direct deposit of payrolls, a firm would have to deal with all the banks where its employees have accounts. Using the ACH facility allows a company to deal only with its own bank, while giving it the opportunity to offer the directdeposit service throughout the company as an employee benefit. A paperless debit is created when a company receives a standing or periodic authorization from a customer to debit that customer’s checking account to pay his bill. The debit system works this way: The customer gives authorization to a firm for debit entries. The company prepares magnetic tape for its deposit and charges to customer accounts and delivers it to his bank. The originating 35 (company’s) bank balances entries to control totals submitted with the firm’s deposit, credits the company’s account and extracts entries for posting to ac counts of customers who are depositors of the bank, produces a tape of entries for other banks and delivers this tape to the ACH. The latter receives the tapes, sorts entries and creates a new tape for routing to the customer’s bank, makes a settlement of entries and de livers tapes to customers’ banks. The receiving (customer’s) bank balances and validates tape entries, posts debit entries to customer accounts and de scribes the charges with the next bank statement. Fixed-amount payments, including insurance premiums, mortgage and loan payments, involve a standing agree ment from the customer to the com pany. The firm then routinely prepares and sends to the customer’s account a paperless debit at each billing cycle. Variable-amount payments, such as utility bills and retail accounts, can be handled in the same manner as the fixed-amount payment. Operating rules of existing ACH systems generally re quire a notification to be sent to the customer each billing cycle before the debit is processed against his account. This procedure allows the customer time to delay or stop the debit if it’s incorrect. The Bill Check system was devised Year 2 0 0 0 W ill See Individual Clearings Rise to 125 Billion, ACH Officer Predicts ITH IN 25 years, 125 billion separate clearings will be going through the banking system! That’s the prediction of James E. (Ed ) True, ex ecutive director, Mid-America Payment Exchange (M A PE X ), St. Louis-based ACH association. However, he adds, because of the rap idly d e v e lo p in g ACH system across the country, 35 bil lion of these items w ill b e g o in g through the ACHs. Thus, the paper work will be cut down considerably. TRUE Mr. True cau tions those who believe ACHs will pro vide immediate answers to banks’ grow ing paper problems by saying he be lieves the volume of checks won’t start decreasing until 35 or 40 years from now. Then, he continues, the number of checks being handled annually will go back down to just about where it is now—25 billion. He compares the or ganizing of ACHs to planting trees: Results won’t be seen immediately, but to achieve those results, the ground work must be laid now. Mr. True is a 20-year veteran of the U. S. Air Force, having retired last year as a lieutenant colonel and chief, Regional Operations Division, Scott Air Force Base, Belleville, 111. He says the Air Force helped pioneer direct deposit of paychecks by E F T , and now 85% of the Air Force payroll is sent directly to financial institutions for disburse ment electronically. In fact, according to Mr. True, in the St. Louis zone of W 36 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the Eighth Federal Reserve District alone, the Air Force is sending 10,320 entries directly to 930 banks. Direct deposits of social security checks were begun on an experimental basis in Georgia and Florida and worked so well that they’re now avail able across the nation. According to a Treasury Department announcement, current enrollment exceeds 33 million per month, including 51,000 payments being made by E F T . Mr. True points out that Equitable Life Assurance Society already is pro cessing more than 30,000 monthly pre mium payments in about 225 banks via magnetic tape. This, he believes, is a major endorsement of E F T S. He says that besides banks in New York, Cali fornia, Georgia, New England and Chi cago now in the Equitable program, the firm is negotiating with banks in some 15 to 20 other areas where ACHs are planned and expects to add 100,000 accounts to the plan each month. As another example of E F T , Mr. True alludes to the American Express checkless-payment plan, under which 68,000 card holders in California may authorize automatic checking-account withdrawals for paying their AmEx bills. These items, says Mr. True, will be processed through the California ACH. Mr. True attributes the rapid spread of ACHs throughout the U. S. largely to increasingly positive response by consumers to the convenience of elec tronic funds transfer, government eagerness to reduce expenses and fraud losses and banks’ need to deal effective ly with growing check-handling prob lems and costs. • • by the Atlanta Payments Project to al low the consumer complete control over the timing and amount of his bill pay ments. Under this concept, the com pany sends the customer a bill each billing cycle. Instead of writing a check, the customer signs the bill stub itself and returns it to the company, thereby granting the firm a one-time authority to initiate a charge to his bank account in the amount specified by the customer on the Bill Check. In this way, the customer retains absolute control; he returns the signed Bill Check whenever he wishes and for whatever amount he wants to pay, or he still has the option to write a check. The Atlanta Payments Project was an extensive research program sponsored jointly by commercial banks and the Atlanta Fed. The project came to a close in 1974 after publishing major research results and included the plan ning and implementation effort for the Georgia Automated Clearing House As sociation. The participating commercial banks were formed into the Committee on Paperless Entries ( C O P E ). In addition to the regional ACHs now located across the country, there’s the National Automated Clearing House Association (NACHA), which was incorporated June 20, 1974, by the four ACHs then existing in California, Georgia, New England and the Upper Midwest. It was formed to promulgate and monitor standards to facilitate the interregional exchange of ACH items, to study and develop educational and promotional programs and to provide' member associations with technical as sistance in activating ACHs. The asso ciation receives staff, administrative and financial support from the American Bankers Association, in whose Washing ton, D. C., offices it is headquartered. However, NACHA is a separate and independent entity from the ABA. Also, it’s an administrative, not an opera tional, ACH. Shortly after it was formed, NACHA bought the SCOPE computer software package and related licensing authority from the Los Angeles and San Fran cisco Clearing houses. The two clearing houses—through their Special Commit tee on Paperless Entries— spent more than 4K years developing the SCOPE software package, procedures, legal documents, operating rules and other related materials. NACHA and the Fed jointly directed the revision of the original software program because— although it was sound—the SCOPE program was de veloped to operate on small-scale IBM/ 360 computers. As a result, the pro gram was segmented into more rou tines than really were needed, and there were too many operator inter- MID-CONTINENT BANKER for April, 1976 Call Red. M a y b e y o u 'll b e lu c k y a n d g e t C h e ry l. When our top correspondent banker, Glenn P. "Red” Ward is out of town, Cheryl Cross minds his business - and she can probably help with your’stoo. No matter what your ques tion m ay involve, Cheryl knows where to find the an swer. She knows our people, and she knows their specific talents. C a ll Red. Or, c a ll W ilbur W aters. K eep your fingers crossed and hope for a soft voiced answer. Call C heryl, the b etter banker's banker. k (918) 587-9171 PÜIH National Fourth Bank hhb lUlsa, Oklahoma M em ber F D I C MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ventions. The new software, developed at the Cleveland Fed, was scheduled to be installed in Georgia and Florida in February and March, respectively, and will be installed in all other regions of the country by the third quarter of this year. NACHA is governed by a board of directors, made up of one representa tive from each member ACH and representing all 12 Fed districts. It also has a nonvoting advisory board, composed of one representative each from the ABA’s Payment System Policy Committee, the ABA’s Operations and Automation Division, the Bank Ad ministration Institute, the Fed and the Comptroller. How does an ACH benefit its par ticipants? The Houston Clearing House Association, which was merged into the Southwestern ACH last September, put it this way in a booklet it pub lished, entitled “The Automated Clear ing House: Toward a New Payments System” : Benefits to the cu stom er/em p loy ee— saves paycheck-depositing time and energy; deposits funds automatically, even during trips or illnesses; elimi nates the danger of lost or stolen paychecks; saves check-writing time and cost for paying bills and postage ex pense; eliminates the worry of paying bills on time and schedules automatic bill payments at regular intervals, thus improving budget control. Benefits to firms—reduces checkpreparation and distribution costs; pro vides the additional employee benefit of automatic deposit; makes funds from receivables available sooner with elec tronic bill payment; eliminates match ing returned checks and stubs or other required procedures when entering pay ments; reduces cost of processing lost and stolen paychecks; improves cashmanagement capability and creates a means of orderly growth in the pay ments system. Benefits to banks— offers customers new and improved ways of making payments; reduces check-processing and labor costs; expands marketing op portunities and again creates a means of orderly growth in the payments system. The various ACHs are designed to fill the need for an interregional ex change capability for electronic debits and credits, while NACHA provides a mechanism for establishing and ad ministering nationwide standards and operating rules for the ACHs. * * Direct Deposit of Payroll Begun as Pilot Project By Four ACH Associations A good example of how automated clearing house associations can provide direct-deposit service for a firm’s em ployees is the program recently an nounced by the Aluminum Co. of America (ALCO A), described as the world’s leading aluminum producer, and Ernst & Ernst, one of the country’s largest public accounting firms. The new pilot electronic funds trans fer program is being handled by finan cial institution computers throughout the Fourth Federal Reserve District, which encompasses Ohio and parts of Kentucky, Pennsylvania and West Vir ginia. It was brought about by a com bined effort of all of the ACHs in the Fourth District. This group includes: the Columbus Regional Automated Funds Transfer System (C R A FT S), Columbus, O.: Mid-America Automat ed Payments System (M A PS), Cleve land; Regional Payments Exchange (R E P E X ), Cincinnati/Dayton; and Tri-State ACH (TRI-SA C H ), Pitts burgh. The program involves a twice-amonth payroll for 350 employees. AL- When You're in St. Louis, W hy N o t Go One Step Further And Take Advantage of the Finest Hotel Accommodations the C ity Has to Offer . . . C h e s h ir e £ o b g e Located between, and only minutes from, Downtown St. Louis and the Clayton Business District (Ü h p s h trr J t m 6300 C L A Y T O N ROAD à SAINT iiiity p LOUIS. MO. 63117 (314) 647-7300 38 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 1976 We've seen the future. G ive us two days and we'll show you how H Im S w Announcing the 5th Annual Payment Systems Symposium on the Future of EFTS, May 24-25, in Chicago. MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For two days we’ll be meeting in the Hyatt Regency O’Hare in Chicago. The topic: electronic banking. The theme: EFTS —Be Prepared. Our goal: to help you respond to the challenge of electronic funds trans fer systems. It’s something we’ve been involved in since 1968. And something you're sure to become in volved in soon —if you're not al ready. Well be discussing debit card development, off premises banking, check guarantee plans, direct deposit programs, legal/ regulatory issues, marketing considerations—and a host of other relevant and important topics. Well feature pre sentations on successful electronic funds transfer systems that will help you to better plan your own payment systems services. But space is limited. We urge you to fill out the coupon below and mail it today or call our Meetings Co ordinator collect [212) 687-0390. After all, it's not every day you get a chance to look into the future and see how it works. p si Meetings Coordinator Payment Systems, Inc., 9 0 Park Avenue, Suite 28C, New York, New York 10016 Please send me: □ Registration forms □ More Information (or call collect 212-687-0390) Name___ Title___ __ .Telephone. Com pany. A d d re s s _ City______ .State. Zip. 39 COA payroll entries are being issued in Pittsburgh for employees of the firm’s subsidiary, Wear-Ever Co. in Chillicothe, O. At the same time, pay roll entries are being sent by Ernst & Ernst in Cleveland to participating ACHs in Columbus, Cincinnati and Dayton in Ohio and Erie and Pitts burgh in Pennsylvania. Payroll entries are being electron ically prepared by ALCOA and Ernst & Ernst and forwarded to their local financial institution, which credits the accounts of its own customers and forwards the magnetic tape to the local ACH. The latter then distributes the items to the various ACHs operating in the Fourth District. A spokesman for the project points out that intra-district efforts such as this will lead the way in establishing the many systems and operations tech niques necessary to bring about a na tional inter-ACH exchange system. New Fed Guidelines Pave Way for Thrifts to Take Part in ACH Systems r P HE F E D has announced interim ACH access guidelines that pave the way for thrift institutions to use the ACH system described in the ac companying article. In a separate, but related action, the Fed released for comment by March 19 a revised proposal to amend Regu lation J to deal with clearing and settle ment of wire-transfer and payment in structions recorded on magnetic tape. The proposed Regulation J revisions originally were released in November, 1973, in connection with a solicitation for comment on the broad issues asso Brokers in Financial Market Instruments NATIONAL MONEY MARKET IN Federal Funds Brokers Call Loans Eurocurrency Deposits Repurchase Agreements Term Federal Funds Bonds Borrowed and Loaned Domestic and Euro C D ’s George Palumbo & Company, Inc. Establiihed 1962 g ¥ ■ & 26 BROADWAY, NEW YORK. N. Y. 10004 Cable: PALUMAC Tel: 2 I2 269 3456 40 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ciated with the Fed’s role in the emerg ing electronic payments system. The revised access guidelines pro vide that Fed banks will handle and process ACH transactions for all mem ber banks and any other depository institution that’s a m em ber o f an ACH group. The guidelines expand consid erably the Federal Reserve Board’s proposal of last June 10 that would have limited direct origination of en tries to financial institutions authorized to maintain demand-deposit accounts. Under the latest guidelines, thrifts that belon g to an ACH w ill b e a b le to originate entries directly from thirdparty-transfer accounts. Although the Fed’s announcement doesn’t focus explicitly on the subject of thrift-institution participation in ACHs, it does say, “In providing clear ing and settlement services for ACH associations, the board anticipates that these services will be made reasonably available on a comparable basis to de pository institutions having need for such services.” In other words, the Fed is putting the question of thrift mem bership squarely up to each ACH and its member banks. Also, Fed-member banks will be able to originate entries even if they don’t belong to an ACH. This means receiv ing institutions will have to seek di rectly from such originators assurances of warranties to guarantee the validity, accuracy and timeliness of entries origi nated. These warranties are in effect administratively for ACH-member in stitutions. Under the new guidelines, items de posited on magnetic tape through an ACH may originate from any thirdparty account, including savings, ne gotiable orders of withdrawal (NOW ) and share-draft accounts. The contro versial NOW accounts were excluded from ACH eligibility in the Fed’s June 10th proposal because, the Fed said, they weren’t “demand-deposit” ac counts. The Fed—in describing the new ac cess policies as "interim guidelines”— noted that it intends to publish, in the near future, a pricing schedule, based on fully allocated costs, for both ACH and check-processing services, at which time the interim policies may be modi fied. In developing the pricing sched ule, the Fed continued, it would con sider the burden of required reserves maintained by member banks. * m New Film on EFT Services From Graduate Banking School MADSION, W IS.— “Electronic Bank ing: Where the Buck Stops” is the title of a new educational film from the Graduate School of Banking at the University of Wisconsin. The 27-minute color film, with an accompanying eight-page planning guide, is designed as a sequel to last year’s movie, “The Future in Your Hand.” This new offering provides step-bystep guidance to bankers considering the introduction of electronic banking services within their organizations. It shows E F T systems in current use across the nation in banks, financial institutions and nonfinancially oriented businesses. “Electronic Banking: Where the Buck Stops” details a road map lead ing to answers for questions such as: “Should we involve our bank in elec tronic banking?” or “How do we go about making an informed decision on this new delivery system?” Purchase price for the film is $250 for members and banks of the Central States Conference of Bankers Associtions and $325 to others. A Planning Guide and film script is provided with each print, and additional guides are available for 50 cents each (100 copies, or more, 45 cents each). Write the Graduate School of Bank ing, 122 West Washington Avenue, Madison, W I 53703. MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “We are an $800 million bank with online CIF. In tune with our fastmoving customers today. Ready for EFTS tomorrow. It’s an NCR system.” Robert T. Golitz, Vice President Winters National Bank and Trust Co., Dayton, Ohio To offer financial services wherever the future requires, a bank will need records that are properly organized and related. And instantaneously accessible. A bank will need an online Central Information File. Like W inters' Customer Integrated/R eferenced File, designed for big banks by EDP Corporation and NCR. Already, W inters is providing consolidated “ b a n k-a t-a -g la n ce ” statements to its customers. And online services from tellers' stations and the backoffice. P oint-of-sale check guarantees and electronic transactions are an easy step away. NCR is the com pany that perfected the com puterized Central Information File. The NCR system is sim ple, effective and fully matured. It can vary to accom m odate banks of any size. Online or offline. For more inform ation, phone your NCR representative. Or write to NCR C orporation, Dayton, Ohio 45479. NCR Complete Computer Systems MACHA Supplies Ads, TV Commercial, Brochures, Other Marketing Aids to Banks a i d s for ail media are offered banks that belong to the Mid-America Automated Clearing House Association (MACHA), head quartered in Kansas City. MACHA is the largest ACH in the U. S. in terms of number of participating banks, with 76% of the 1,844 banks in its territory signed up. The ACH—incorporated in January, 1975, and operational since last July— covers western Missouri, Kansas, Oklahoma, Nebraska and Iowa. MACHA officials believe that before any bank can become successful in sell ing automated payroll and other ACH systems to customers, it must educate the public. Therefore the ACH has pre pared several marketing tools for its members. For instance, it has three audio/visual presentations banks can use to enhance their own marketing programs. According to MACHA, these are particularly effective when used at meetings of civic groups such as Kiwanis, Lions and Rotary clubs and chambers of commerce. What’s more, says MACHA, if a bank furnishes a speaker with such presentations, it could possibly sign up new business on the spot. MACHA suggests that the educa tional value of these programs is per fect for those times when bankers are called on to speak at their area schools. As MACHA points out, giving these audio/visual programs at schools not only will help educate a community’s future business people, but it also could be an opportunity to sell an entire school district on automated payment systems. Probably the best of these presenta tions, continues MACHA, is a 16mm full-color film dealing with MACHA’s role in banking’s electronic future. It explains in detail the benefits of auto mated payroll deposits, pre-authorized credits and Bill Check. MACHA says the film already has proved to be popular among bankers, and it also can be an effective presentation for cus tomers. This presentation also is avail able in 8mm cassette form. Also available from MACHA is a consumer slide presentation which it describes as “the perfect supplement for a talk or forum discussion on bank ing. Exposure to the latest trends in the financial industry would be of par ticular benefit to young people since it is they who will be affected greatest by electronic banking.” A third presentation available from MACHA is a comprehensive slide show a r k e t in g M 42 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PAYING BILLS IS A PAIN IN THE CHECKBOOK! All that w riting, figuring, sighing, licking of stamps and envelope flaps . . . Who NEEDS it?!! Especially when there’s a new easier way to pay your regularly recurring bills! Companies throughout Mid-America are offering their customers a new bill-paying service to save time, money j and effort. THE WAY IT WORKS IS SIMPLE! Every month, wl your reg ularly r authorize! Examples of bills which you may choose to pay this way are: loans, utility bills, leasing fees, installment payments, mort gages and insurance premiums. Simplify your life! Let us pay yo ur bills! Never allow the "bill-paying blues” to ruin another perfectly good month! You call the shots. We keep track of the score! AU TO M A TIC BILL PAYING. PRE-AUTHORIZED. SAFE. CONVENIENT! For more inform ation, call us! (YOUR BANK NAME) This is s a m p le o f n e w s p a p e r a d M A C H A sup plies its m em b ers. This a d describes a u to m a tic b ill p a y in g concept a n d its b en efits. produced by the National Automated Clearing House Association (NACHA). Three cassette tapes are available with these specific audiences—bankers, cor porations and consumers. As MACHA points out, these programs will help banks acquaint present customers with the need for automated services and also can help banks attract new busi ness. MACHA also has put together three informative brochures for banks that want to give customers specific infor mation on automated payment systems. MACHA believes these brochures make great selling tools because they explain the direct benefits received from an ACH. There’s space on each brochure for imprinting individual bank logos. One brochure is specially designed for use by bankers who call on corpo rate and business customers. Entitled “How Your Company and Your Em ployees Can Benefit From Automated Payroll Deposits,” it explains the bene fits of automated payroll deposits as well as pavment of pre-authorized re curring bills such as insurance premi ums, mortgage payments, installment loans and utility bills. The brochure illustrates today’s system of traditional paper checks and compares it to the new APEX (automated payments ex change) system offered by MACHA banks. Another brochure is designed to be a statement stuffer. Called “Managing Your Money,” it explains to the cus tomer, in general terms, the clearing house, its capabilities and the benefits of automated funds transfer. The third brochure— “Announcing a New Service (now available to every employee with a bank checking ac count)—has the objective of selling automatic payroll deposits to em ployees. MACHA believes this material will benefit firms that have decided to use the automated payroll system and want to explain its benefits to their employees. The brochure stresses such benefits as greater safety, more con venience and speedier deposits. Because many banks without ad de partments have asked MACHA’s help in developing local advertising, the ACH has put together a series of ads on direct payroll deposit and automatic bill paying services. These ads, says MACHA, are ideal for local newspapers and other print media. They’re avail able in a special Ad Mat Kit containing three formats. One explains the auto matic bill paying concept and its bene fits. The other two describe direct pay roll deposit, one elaborating on the benefits of direct deposit for the com pany and the other relating benefits to the employee. Two copies of each ad are in the kit. The newest MACHA publication for its members is a brochure called “E .F.T .S. . . . and how it affects YOU.” It’s to be used as a customer contact guide and is written in a simple, direct tone to make the understanding of automated services easy for customers and employees. MACHA recommends that banks supply their tellers with these booklets because they serve a dual purpose: Thev help tellers answer customer in quiries about these services, and they can be eiwm to customers so that they can be studied. The television medium hasn’t been forgotten by MACHA, which, in co operation with its ad agency, John Quastler & Associates, created a com mercial about direct payroll deposit. The 60-second spot features Jim McCrill, moderator of the top-rated TV game show, “Celebrity Sweepstakes.” The commercial was video taped in a Kansas City TV station, and an elabo rate set was designed especially for it. This set also was used as the back drop for a series of marketing meetings MACHA held this February and March MID-CONTINENT BANKER for April, 1976 FI F fT R O N ir MmtaLtAmT^mTM I % \ # 1 ^1A ^HT R A U k lU r . mJßä Mil n|lm l 1 n|\JI "The Extended Forecast" W e usually k n o w about today and w e can be reasonably sure about to m o rro w but w h a t about "th e e xtended fo re c a s t” ? W e w a n t to k n o w about the long range outlook, w h e th e r it's th e w ea th e r, the econom y, or th e shape of things to com e. W e at The Fourth are not seers, b ut w e are co nsta ntly studying and preparing to guarantee to p service to our custom ers. W e are not just a tte m p tin g to keep pace w ith the trend — w e are energetically m arshalling our forces in productive pioneering. W e w a n t to be am ong the firs t but only if it m eans b etter service to our cu stom ers, our bank ing friends, and th e ir custom ers. One such step fo rw a rd has been The F ourth's plan to develop a n e tw o rk of ele ctron ic banking te r m inals. This m ajor c o m m itm e n t to electronic banking is an advance m en t in w hich our fe llo w Kansas bankers can share. Join us in facing th e challenges o f a n e w banking w orld, m eeting th e c o m p e titio n of o the r financial and non-banking institutions, and m o st im portant, taking banking to the people. Electronic banking is only a part of "th e extended fo re c a s t” . There are a lot of new and exciting challenges ahead of us. A part o f the fo re cast is our prom ise to keep abreast of the changes and to m ake you our partner in progress. TheFourth FOURTH NATIONAL BANK & TRUST CO./WICHITA, KANSAS MEMBER FDIC MID-CONTINENT BANKER for April, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 43 in Kansas City, Wichita, Lincoln, Neb., and Oklahoma City. They were de signed to help member banks plan and implement a marketing strategy for ACH services. The program included answers to three questions: Where have we been? Where are we now? Where are we going? There was a re search report on “Consumer Acceptance of Automated Payroll Deposit” by Tom Weise, executive vice president, Com munity Response, Inc., Omaha. In ad dition, MACPIA advertising was spot lighted, and three topics were dis cussed: “Perspective: Success Stories of Marketing MACHA,” “Adding Sex Ap peal to Your Marketing Plan” and “Placing the ACH in Perspective With the Entire E F T S Movement.” MACHA also publishes a monthly newsletter, Input, whose objective is to keep the ACH’s members current on all that’s new in the ACH field, not only in MACHA itself, but in other ACHs across the country. In addition, MACHA has begun publishing an O p erations N ew sletter, which explains procedure difficulties as they arise. * • Let our billion dollar organization help your bank profit. Call W ilbur Hufham (205/832-8450), a member of our correspondent banking team. First Alabama Bancshares, Inc. Affiliate Banks First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama First Alabama Bank of Montgomery, N. A. Bank of Birmingham Bank of Huntsville, N.A. Bank of Tuscaloosa, N.A. Bank of Dothan Bank of Selma, N.A. Bank of Gadsden, N.A. Bank of Athens, N.A. Bank of Baldwin County, N.A. Bank of Guntersville Bank of Hartselle Bank of Phenix City, N.A. Bank of M obile County R rs t/U a b a m a 44 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Medical Payments Via ACH Because of the ACH movement, Kansas Blue Cross and Blue Shield subscribers now can authorize auto matic payment of insurance pre miums through their local banks. The new service is a result of the close cooperation of Merchants Na tional, Topeka, the Mid-America Au tomated Clearing House Association (MACHA) and National Sharedata Corp., the Western Union telepro cessing division that performs facil ities management services for banks. This application of automatic bill paying should generate more than 40,000 electronic debit entries per month, says MACHA, and affect nearly every bank in Kansas. The hub of the operation, located within the Topeka computer facilities in Merchants National, is an IBM/36040 computer with extended core. National Sharedata manages Mer chants National’s computer facility. Clearance is handled automatically by MACHA. Even cemeteries are availing themselves of ACH services. MACHA reports that U. S. National, Omaha, signed up West Lawn Cemetery as its first customer on its ACH system. And the cemetery not only is offer ing direct deposit of paychecks to its 40 employees, but also is selling grave sites and grave markers on a monthly, pre-authorized payment plan. HC's Share-Draft Program Is Approved by Ala. CU League B IR M IN G H A M — T h e Alabama Credit Union League has offered its members use of the share-draft system of Central Bancshares of the South, Inc. The HC will be the facility handling member drafts for the league. Central’s share-draft program allows members of participating credit unions to have direct access to their share/ savings accounts. Formerly, members had to visit or phone their credit union offices to withdraw share funds. They now will receive a book of drafts allow ing withdrawals. Through the share-draft system, credit unions throughout the state will have immediate access to process mem bers’ share drafts through Central Bank data centers located in Birmingham, Montgomery, Decatur and Mobile. Al though more than 70% of the state’s credit unions are located in those areas, the services now are available to those in outlying areas. Training sessions for the program will be held at league headquarters here. Credit union technical representa tives will meet with Central Bancshares technicians to begin implementation of the program. MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TAKING THE MYSTERY OUT OF EFT S PIPS... the banker’s answer to automated deposit and payment services. PIPS* REMITS* and related FIS development prod ucts provide the basis for long range EFTS product planning. Our modular approach to payment sys tems offers low cost entry into funds transfer serv ices and provides the accounting links to internal applications such as DDA, Savings, Mortgage and Instalment Loan. PIPS, for example, takes the guesswork out of ACH and NACHA processing requirements. With more than fifty banks currently installed, you’re no longer a pioneer. PIPS modules make it easy to automate direct deposit of payroll, preauthor ized payments, internal transfers, and to guarantee social security deposits. The result: Increased fee income and reduced y .4 operational costs as paperless transaction volume grows. PIPS is another development product from FIS... your total EFTS vendor. 5 Financial Industry Systems 150 Windsor Street, Hartford, Conn. 06115. (203) 728-4271 A partnership of Hartford National Bank &Trust Company and Martin Marietta Corporation. ‘ Paperless Item Processing System ‘ Remote Item Transaction Switch Variety of EFT Package Plans Available to Correspondents Most include A TM ¡POS capability, some systems statewide T HE SCRAMBLE is on among upstream correspondents to provide EFT capability to downstream correspondent banks. Although some of the programs are not yet operational, most have been presented to prospective participants and arrangements are being consummated. Some programs are limited to metropolitan areas of large cities, others are statewide, with plans for enlargement to regional status. Virtually all offer a stable of basic services, most with on-line capabilities. On this and the following pages, Mid-C ontinent Banker presents capsule reports on services being offered or planned by large banks to their cor respondents. PO S, A TM Plans for Correspondents Bank Has EFT for S&Ls O ffered by Continental of Chicago ONTINENTAL Illinois National, Chicago, offers its correspondents two E F T S packages—POS and ATM. The POS service is presently in op eration at Chicago metropolitan area food stores. The key to this system is the Automatic Banking Card, which participating banks make available to their customers. The cards provide ac cess to check-cashing privileges for cash or purchase at any of the stores. Participating banks determine eligi bility and check cashing limit criteria and Continental supplies the line net work, terminal technology, Automatic Banking Card technology, Automatic Banking Cards, documentation, systems security and marketing support. The POS/ATM service, which in cludes the Automatic Banking Card, enables correspondents to provide thencustomers with a number of banking C 46 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis number of modules needed to provide the level of service desired. Banks participating in the POS/ATM service can purchase or lease ATM units or lease them with option to buy. All POS terminals are owned by Conti nental and supplied to merchants. Promotional support includes infor mation brochures to be used as state ment stuffers to explain automatic banking. They include applications for cards. Card carriers for mailing banking cards to customers are also available, as are standard mailers for personal iden- services, including ready identification of the customer by tellers and service personnel for check cashing and access to ATMs for deposits, withdrawals, payments, transfers between accounts and check-cashing privileges. The POS services described above are also of fered. According to Continental, the POS/ ATM service is versatile enough to adapt to any need, any bank and com plete enough to offer complete systems support, card issuance, marketing as sistance, machine service training, and lease/purchase options. Costs of the services vary, depending on which of the two is selected. The services are modular in design. Par ticipating banks buy only the services they think they will need and pay only for what customers use. Specific costs for any one bank are based upon the Continental Illinois National, Chi cago, is offering an EFT service called “Impulse 2” to the savings and loan industry. The service is de scribed as offering a full range of financial transactions through Con tinental’s POS/ATM network in the Chicago area. Components of “Impulse 2” in clude debit cards, financial transac tion terminals, the merchant net work, marketing assistance and com puter programs. The service is available in two modules. Module One consists of savings account withdrawals and NOW/check guarantee service. Module Two offers savings account deposits and withdrawals and NOW account deposits and check guaran tee. Both modules are based upon on line real time systems that are avail able at all times that the network’s 200 POS food store locations are open for business. ATM service is also available on an on-line basis. MID-CONTINENT BANKER for April, 1976 DRIVE-IN BANKING GOES OVERHEAD! https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AUTOVEYOR . . . A Unique new overhead system that makes sense and saves you money... costs 25 to 33% less than current systems and gives you greater efficiency with fewer problems. The Autoveyor modular system can be installed in a week and a half with no trenching, no interruption to business. Attractive and practical, it costs less to operate; has fewer malfunctions and maintenance problems; is easier for cus tomers and tellers; saves time and space . . . and it’s a maximum quality system. Those are some of the advantages! Contact: Get the full story on E. F. B A V IS Autoveyor now . . . com & A SSO C IATES, pare it with any other INC O RPO RATED system . . . then decide. 200 Jimson Road, We think you’ll pick the Cincinnati, Ohio 45215 B A V IS Phone: 513/733-3589 system of the future. tification numbers, which are mailed to customers separately from the plastic cards. Receipt forms for use in ATMs and envelopes for making deposits are avail able, as are promotional materials, in cluding informational newsletters and advertising materials. Participating banks are asked to sup ply the location and construction neces sary to house ATMs, daily servicing and balancing of ATMs and account maintenance information for the POS/ ATM information file. As of last month, four correspondent banks were participating in the Auto matic Banking Card system. Continental Bank has also developed a service called Continental Payday, which is a direct payroll deposit pro gram for correspondents utilizing the ACH to switch deposit information via tape input to customer accounts at 70 area endpoint banks. * • 2-State ATM Network Offered by Central Trust To Correspondent Banks ALMOST EVERY BANK NEEOS ONE OF THESE PRODUCTS FOR: Re-entry of Reader-Sorter Rejects Correcting Encoding Machine Errors DOCUMENT CARRIERS Document carriers played a significant roll in the re-entry of two billion plus rejects last year. Banks with automatic check processing equipment that are not using document carriers should consider their use for correcting reject items. Important Features • Accurate, uniform glue lines provide a strong bond and there are no glue lines to encode over. • Use of Photo-Vu and Glass-Vu top sheet paper creates ease in m icrofilm ing and reading and freedom from static electricity. • On all Glass-Vu and Photo-Vu document carriers the bottom of the top sheet is trimmed from the encoding area to provide an ideal surface for encoding. These styles are especially recommended for the new NCR-775 proof machine. • Forms 0-871 and 0-851 are constructed of a special heavy duty Photo-Vu paper. The front and back of a document may be microfilmed from both sides w ithout removal from the carrier. CORRECTION LABELS Automation Forms Co. correction labels are manufac tured from a special material that was selected for its excellent surface finish for encoding as well as excellent shielding of original encoding. An inexpen sive sure way of correcting documents. AF correction labels are furnished in dispenser boxes with adhesive on the bottom for ease of use at various work stations. CORRECTION FLUID Fast Removal of Encoding Automation Forms Correction Fluid removes ribbon encoding with a fast drying solution so that re-encoding will be sw ift and accurate. The use of bottled solvent insures a clean eraser each time as the dauber is dipped into the solution and the ribbon residue is captured by a small but powerful magnet. WRITE OR CALL FOR SAMPLES, PRICES, INFORMATION AUTOMATION FORMS CO. INC. P. O. Box 401786 • Garland, Texas 75040 Phone (214) 272-8531 48 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ORRESPON DEN TS of Central Trust, Cincinnati, can participate in a regional ATM network established by the bank last October. A point-ofsale interchange system is expected to be available by late summer. The network allows customers of par ticipating banks to withdraw funds from their checking accounts or secure cash advances against their credit card accounts on a 24-hour-a-day basis. F if teen ATMs are now in service, 12 in Central Trust banking centers through out Hamilton County, Ohio, and three in Kentucky at installations of Coving ton (Ky.) Trust. Other banks in the regional trade area are expected to announce participation in the network in the near future, according to a Central Trust spokesman. Central trust defines its regional trade area as extending 25 miles south of Cincinnati and 25 miles north of Dayton, Ohio. Present plans confine the reciprocal network system to these limits, within which customers of par ticipating banks are said to conduct 99% of their banking transactions. Area banks join the network for a five-year period on an annual fee basis. Correspondent banks outside the re gional trade area are offered systems and marketing assistance on a con tractual plan. The POS system to be offered this summer will be an expansion of Central Trust’s check cashing authorization program now in operation in 47 super markets in the greater Cincinnati area. Expansion plans include additional re tailers as well as correspondent banks, whose participation will be integrated into the system on a transaction fee basis. Since Central Trust’s E F T package is based on an automated C IF, the C First of K.C. to Offer EFT First National, Kansas City, is making plans to offer an EFT ser vice package to its correspondents that will include access to the Fi nancial Communication Services ( FC S) five-state ATM/POS network as well as other services. The bank is currently offering a CIF system for demand deposits and savings. Accounts are accessed for inquiry and memo posting via CRTs and teller terminals. Thermal print ers are also utilized to produce an “instant statement.” The bank is planning to bring all retail applications under its CIF system, including a new overdraft banking program, and then offer a combined descriptive statement. Other tie-in services to the FCS offering are currently under consid eration, a spokesman said. timetable for implementation of the system by a correspondent is deter mined by the correspondent’s capability to convert to C IF—usually from four to six months. Central Trust supplies full marketing support to network banks, including use of the name “Day and Night Bank,” as Central Trust’s automated teller ser vice is known. Systems and marketing assistance in the production and distri bution of debit cards are also a part of the E F T package. All literature and print advertising previously produced by Central Trust for its own use is offered for adaptation by correspondents, along with a record of Central Trust’s usage of the ma terials. A history of the bank’s experi ence with various promotional concepts and employee training programs is also made available, along with accessibility to materials used therein. Network advertising is produced through Central Trust’s advertising agency and new promotional or edu cational literature is produced so as to be usable by interchange banks and is offered to them prior to production. # * Wright Patman Dies Rep. W r ig h t P a tm a n (D .,T e x .), f o r 12 y e a rs chairman of the Ho use B a n k in g and C u rren cy C o m m i t t e e u n til b e in g o us ted la s t y e a r , d ie d of pneu m o n ia M a rc h 7. He w a s 8 2 . M r. P a tm a n h a d just re c e n tly a n nou nced p la n s to re tir e fro m Congress w h e n his c u rre n t te rm e x p ire d n ex t Ja n u a ry . MID-CONTINENT BANKER for April, 1976 “Thanks to First Security, we got in the Bank Am ericard business without getting in the credit card business? Alpha M. Hutchinson, President Citizens Bank of Morehead, Kentucky Citizens is a thriving, $14 million bank in a highly competitive two-bank market. Mr. Hutchinson feels that the bank’s strong growth record may be attributed, in part, to its initiative in bringing new services to Morehead. Example: the First Security BankAmericard. “Prior to 1969, there was no national charge card available through a Morehead bank. We had long considered introducing a card, but becoming a BankAmericard center required an investment in people and money we simply couldn’t justify. “First Security proposed an extremely attractive alternative. We would offer the First Security BankAmericard through our bank, but they would handle processing of applications, billing, delinquencies —all the headaches. “In August of 1969, we sent a few people to First Security for a day of training, began contacting local merchants about participating, and started promoting the card to our customers. The program was enormously successful. Today, between 30% and 40% of our customers have our BankAmericard. The customers are happy. The merchants are happy. And we not only have another source of income, but we have a service that attracts new customers. “The BankAmericard program is typical of our correspondent relationship with First Security. We like doing business with them. They’re professional, they’re cooperative, they understand our business. And they’re accessible—they’re here regularly in person, and we use their toll-free number a good deal to get information or solve problems. “I’d have to say First Security has made a real contribution to the growth and success of Citizens Bank. I expect to be working with them for years to come.” To learn more about BankAmericard and other First Security services, call Sam Adams, Vice President, Correspondent Services, toll-free: (800) 432-9543. First Security NATIONAL BANK & T R U ST COMPANY Lexington, Kentucky Member F.D.I.C. Big enough to bend a little MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 49 EFT C ap ability Readied By American N a t'l, St. Joe Package Plan for EFTS Capability O ffered by National Boulevard, Chicago PACKAGE pointing to an E FT S capability was offered to corre spondents of National Boulevard Bank, Chicago, in January. According to William R. Beckmann, director, advertising and public rela tions, services available to correspon dents include demand deposit accounting-Mach I with overdraft banking, account reconciliation and customer ac count analysis; off-line savings—pass book or statement; installment loan with simple interest, dealer reserve and charge-off module; real estate with monthly billing or coupons; commercial loans; CDs; payroll; general ledger; intercept of Fed cash letter (on us items) with intercept of payment from the Fed and intercept of transactions from ACHs; and clearing of transit items through the Chicago CHA, the Fed or by direct sendings to corre spondent banks. Future services include off-line C IF, retrieval of signature cards with the use of a microfiche, in-house system to generate computer output microfilm for storage purposes, a building manage ment package to process rent receipts and origination of ACH paperless entries. In July, the bank will begin an audio response system through the use of tele phone equipment to establish a basic system for C IF and at that time a demand deposit and savings on-line inquiry system using touch-tone phones will be available to correspondents. All or part of the bank’s applications can be bought by a correspondent, de pending on the compatibility of the equipment the customer is using with National Boulevard’s equipment, Mr. Beckmann said. About a year ago, National Boule vard implemented a new demand de posit accounting package that provided a less complicated system for bank op erations, Mr. Beckmann said. The sys tem has the ability to process DDA and overdraft checking on one system with less chance of error. Other ad vantages include a greater amount of historical information obtainable in lieu of just the closing balance, the elimina tion of several reports that were pre viously done manually and the ability to interrogate the customer reference file so that name and address changes and overdraft checking are unified. Mr. Beckmann said the bank also installed an installment loan package that includes a customer module to a A 50 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis charge-off module including reports on late charges (waived and reversed), dealer reserve, credit life, collision in surance and total outstanding loans. A loan exceptance report is generated with any unusual activity; as is a new account journal that gives the name of the customer, interest accrual on the loan, rate of interest and other perti nent information. Also, the system pro vides physical damage reports, chargeoff lists, trial balances, paid out letters, late notice warning of assessments, co maker notices, monthly past due re ports, monthly repossession reports^ monthly accrual reports and six or more different analyses reports. Mr. Beckmann says the bank plans to offer its services in the midwest. Marketing assistance will be available in the future. * * American National, St. Joseph, Mo., is offering correspondents in Missouri, Kansas, Nebraska and Iowa the ability to handle entries processed through the Mid-America Automated Clearing House Association, such as direct de posits, transferring of funds and auto matic debit and credit entries. The bank also has ATMs with on-line capa bilities, which will be offered to cor respondents this year. The bank expects to offer the ability to inquiry or post entries directly into its computer in the near future through customer bank communication termi nals or through single-pocket proof ma chines. Entries into the computer can soon be made from POS terminals, which will be installed by American National. The bank’s marketing department of fers aid to correspondents in their ef forts to familiarize and educate cus tomers about the effects E F T S will have. ChecOKard Guarantee, Verification Plan Franchised in Oklahoma by Liberty Nat'l N ON-LINE computer-terminalbased check guarantee and verifi cation system called “ChecOKard” is being franchised in Oklahoma by Liberty National, Oklahoma City. The bank franchises the ChecOKard name and coordinates issuing the check guar antee and verification cards for the service on behalf of participating banks. Initial participation included 20 banks in the greater Oklahoma City area, but the service is available to any bank in the state, according to J. W. McLean, Liberty National’s chairman. The system is operated by National Sharedata Corp., an organization spe cializing in data processing services for banks. The ChecOKard service consists of a card with a private identification code issued to customers of participating banks. It provides immediate check guarantee and verification to merchants at the point-of-sale through a telephone terminal hooked up to National Sharedata’s computer system. ChecOKard further provides a guarantee by the sponsoring banks that the customer’s check will be verified for any amount and guaranteed up to $100. The system was designed to result in check-cashing ease for consumers, who were often held up in register A lines in the past waiting to present drivers’ licenses and as many as five credit cards for identification. In some cases, customers had to submit to being photographed or fingerprinted before their checks would be accepted. The obvious benefit to retails is the reduced risk from bad checks, Mr. McLean said. During interviews conducted with a cross-section of retail merchants in re searching the need for a check verifi cation-guarantee service, it was dis covered that the three most frequently mentioned problems in accepting checks for payment of goods and ser vices were (1) merchants being forced to adopt expensive systems of positive identification because of the bad check problem; (2) the resultant slowdown in the movement of customer traffic, caus ing understandable irritation on the customer’s part; (3) and the increasing expense of the identification systems themselves beyond the losses incurred from bad checks. Marketing support for ChecOKard included large two-color newspaper ads in Oklahoma City announcing the ser vice with a headline stating “Coming soon . . . ChecOKard, the card that tells everyone your check’s OK.” The service began late last year. • # MID-CONTINENT BANKER for April, 1976 Here’s how to stay open for business even when your doors are locked. It’s easy. \ W ith Moneycardand the 2 4 - H o u r M in iBank, your bank can be open fo r business e ve ry second o f the day. A n d fo r a i l kinds o f transactions . . . w it h drawals, deposits, trans fers, even loan payments. An offer like that will make yourcustomers happy that th e y’re banking w ith you. And i t ’ll make your com p e tito r ’s customers wonder if they’re banking in the right place. Meaning more business fo r you. And more profits. Moneycard is your ticket to m ove r ig h t in t o a u to m a te d banking and EFTS. Quick and easy. And i t ’ll be a move fo r the better, too. S im p ly sta te d , th e p u b lic likes M o n eyca rd enough to move the ir account to the bank that offers it. Which b rin gsu sto an o th e rp oint: W e ’ve got a proven promotional campaign to let the folks in your mar ket know that Moneycard is there. And that you’re the bank that has it. Every detail o f the campaign is customized fo r you. And every Moneycard you issue w ill have your name on it. Don’t let operational thoughts hang you up either. Because M o n eyca rd w i l l w o rk w ith all kinds o f equip ment . . . Docutel, Diebold, Mosler, whatever is most com patible w ith your total system. We can even arrange fo r the purchase or lease of your Mini-Banks. And because w e ’ve been in the automated banking busi ness fo r so long, we can show you h o w to f in e - tu n e y o u r whole Moneycard program to keep it running smooth. Okay, if you’veconsidered auto mated banking, but you still aren’t convinced about what it can do fo r your business, w e ’ve got just the man to call: Jack Fleischauer, 1-800-482-8484. Hecan treat your questions w ith answers based on experienceand results. And hecan even let you in on a few se crets about what the futu re holds in store fo r Moneycard. Which, incidentally, might have something to do w ith the futu re of your bank. You’ll be impressed. Moneycard. For both the bank and the customer . . . I t ’s Great To Know You G ot It. WORTHEIM Bank & T ru s t Company, N. A. a fabco company L ittle Rock, Arkansas Moneycard. For both the bank and the customer. . . It’s Great To Know You Got It. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MEMBER FDIC I ■Hi 1st Oklahoma Bancorp. Offers EFT Plan To Banks, Thrifts, Credit Unions in State IR ST DATA Management Co. (F D M C ), Oklahoma City, a divi sion of First Oklahoma Bancorp., is offering an on-line E F T network to fi nancial institutions, including banks, thrifts and credit unions. The firm introduced an automated C IF system in 1974. During the fol lowing year, the firm converted 15 of its bank customers to a new on-line C IF and, with those conversions, has set a network in place spanning the entire state of Oklahoma. Such an un dertaking was necessary to achieve a true POS system that would have state wide and regional acceptability, ac cording to a spokesman for the firm. Fifty more FDM C customers will be converted to an on-line environment during 1976. FDM C is in the process of establishing its first POS operation this year in cooperation with Stillwater National. The POS program is called SCS (Service Card System). It is said to be unique in that a participating financial institution can maintain its local identi ty by issuing plastic cards of its own design. Each design includes a small “SCS” logo, which indicates to mer chants or financial institutions located anywhere on the network that the cus tomer can access his accounts for on line transactions. FDM C, in conjunction with com F mercial banks participating in the pro gram, will place terminals in major shopping areas throughout Oklahoma so participants of SCS can use their cards in areas where they shop and travel. At the present time, FDM C is pro cessing more than 180,000 customer accounts through the on-line SCS sys tem, which represents about 16% of its customer base. This figure is expected to increase rapidly as the system ex pands. * * First B a n k m a tic s ta n d in g N a t'I's Pictured in s ta lla tio n structure P a rk w a y a re F ac ility (fro m is lo c a te d a d ja c e n t I.) in to K a nsas B e rn a rd in fre e C o m m e rc ia l C ity , K an. Ruysser, pres.; Don B arnes, s.v .p .; M a x D icke rs on, s .v .p ., cor re s p o n d e n t and d e p t, head; Bob C h e n o w e th , v .p ., EFTS ta s k g ro u p ch. O perated by Commercial N at I, KC, Kan. ANKMATIC is the name chosen for an on-line 24-hour ATM ser vice expected to begin operations this month in Kansas City, Kan., operated by Commercial National. Bankmatic is said to be the first sys tem of its kind to operate through a commercial bank’s automation facilities in the state of Kansas. The first unit will be located adja cent to the bank’s Parkway Facility, which is located in a growing retail area within a dense residential market, according to Bernard Ruysser, Com mercial National’s president. B American National, Chattanooga, offers its correspondents a number of E F T services, both on-line and off-line, according to James E. Goodner, executive vice president of the bank administration division. Mr. Goodner says the most accurate measurement in the success and acceptance of automation in the financial industry is the ATM, which is being utilized by more people each day. The system is available to American National’s corre spondents, either on an on-line or off-line basis, along with marketing support systems. American National plans to offer its correspondents support for “Signet,” the forthcoming national debit card from Interbank Card System. Mr. Goodner says the bank supplies its correspondents with the following E F T services: On-line— Merchant check verification; merchant check guarantee; charge card authorization; interface to national debit card systems; interface to ACHs; un manned teller machines (mini-branch or stand-alone); manned teller machines; full-function POS terminals; audio and video data entry and inquiry for C IF, DDA, time deposits, loans; remote computer attachment for check processing and C IF. Off-line— Social security direct deposit; payroll direct deposit; microfiche ser vices; and internal funds transfers (demand-to-savings and demand-to-loans). The bank also offers leasing of E F T equipment. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis : , Bankmatic System to Start This M onth; American N at I Lists EFT Services 52 * .7» E F T S Task Group Chairman Robert W. Chenoweth said the bank stands ready to assist correspondents in estab lishing their own Bankmatic systems. The program for correspondents in cludes liaison service with manufactur ers in selection of ATM equipment; site analysis and recommendations; archi tectural plans for drive-up or walk-in structures; interface coordination of ATM units with Commercial National’s computer; consultation on selection of ATM customer procedures; consumer notification and information data; total marketing support; and continuing con sultation and service by Commercial National’s E F T S task group. Participating banks may use the Bankmatic logotype and Commercial National will arrange with manufac turers for production of cards and other supplemental materials, including pre mailer pieces, secret personal ID num ber mailers, card mailers, notification forms and envelopes and promotional literature. If desired, Commercial Na tional will furnish Bankmatic banks with customized newspaper ads, TV and radio commercials and outdoor ad vertising designs. Commercial National plans to add supplemental Bankmatic installations in several non-banking locations to serve specific segments of the commu nity and further expand its marketing background. At present, plans call for units in a major metropolitan retail center and an industrial area. Bankmatic customers use plastic cards to withdraw cash from savings or checking, to make deposits, transfer funds from checking to savings or from savings to checking or to make balance inquiries. • * MID-CONTINENT BANKER for April, 1976 Som e o f die ways to decide w hether an A u tom aticleller is in the sam e league w ith Diebold TABS Total A utom atic Banking Systems* If you’re thinking about an automatic teller, make sure you get all the established advantages of Diebold TABS Total Automatic Banking Systems. For example: □ Diebold TABS was the first system installed for shared use by multiple financial institutions. □ Diebold TABS has a programmable video instruction screen. It enables you to cross-sell your other services—it also lets you change the transaction selection any time you want to. □ Diebold TABS has been interfaced w ith main frames and communications protocol by IBM, NCR, Burroughs and Honeywell. □ Diebold TABS is operating on-line. Is also available in off-line and on-line with off-line reversion modes. □ Diebold TABS is backed by a complete Diebold commitment, one that includes a softwares design and engineering staff, marketing support, and a qualified service organization. □ Diebold TABS is available in walk-up, drive-in or lobby unit models — over 500 units currently installed or on order. □ Diebold TABS Total Automatic Banking Systems: performance is their best recommendation. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ure \X¿ rV- 0^ DIEBOLD I N C O R P O R A T E D CANTON. OHIO 44711 D o rò u n d erestim ate T h e S p irit o f A m erica* Frankly, we were a little surprised. And pleased. Our Spirit of America program has received excellent acceptance during the short time its been available. Spirit of America is really quite a complete Bicentennial program featuring our Spirit of America checks plus a special cover, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis enclosure and simulated wood grain box. And for your bank, there are commemorative prints, scrolls, posters, lobby displays, news paper ads and material for radio and TV. If you haven’t already joined in the cele bration, ask your Deluxe representative about this exciting new program. m CHECK PRINTERS, IN C Ift jWN Ati/ m Diverse ATM AAodels Moneycard D ebit Card Interchange Put Into O peration by W orthen Bank HE F IR S T part of a new E F T service being offered to correspon dents of Worthen Bank, Little Rock, be came operational recently. It’s called Moneycard, a debit card operation. Services available with Moneycard include card production (with bank logo), assistance in card base selection, embossing, encoding, initial card issue coordination, card control and card base updating. Moneycard is described by a Worthen representative as the corre spondents’ entry into a state-wide, multi-bank, multi-vendor interchange. The interchange is achieved by encod- T M o n e y c a rd d es ig n fe a tu re s sketch of G e o rg e W a s h in g to n , inclu des lo g o o f p a r tic ip a tin g cor re s p o n d e n t bank chisee, W o rth e n and no re fe re n c e to fra n B a n k, Little Rock. ing Track III using the M INTS stan dard. Track I and ABA Track II are also encoded. The multi-vendor interchange con sists of seven Docutel ATMs and will eventually include Diebold and Mosler machines. The interchange began with 12 Arkansas bank participants operat ing 26 ATMs manufactured by Docu tel, Diebold and Mosler. The interchange will be limited to the state of Arkansas initially, but plans are being made to expand to surround ing states. Interchange banks are spread throughout the state and all are expected to be operational with the service by mid-May. Marketing assistance provided by Worthen includes an advertising pro gram with newspaper ads, radio com mercials, outdoor posters, employee badges and counter cards. Employee training assistance is also available. Worthen also offers correspondents volume price breaks on ATM receipts and related supplies. Most participating banks in the net work will operate their ATMs off-line, but one will be operating on-line. Sev eral other participants are expected to convert to on-line operation later. One bank will be using one of its ATMs as a stand-alone branch. * * A u to m a te d a b le fo r T e lle r just M a c h in e s about b a n k e rs n ee d th e m any (A T M s) ty p e a re of a v a il o p e ra tio n fo r. TOP: M o s le r's T e lle r-M a tic M a r k II u n it can be in s ta lle d in sheds fo r d riv e -in o p e ra tio n as w e ll Fourth National, W ichita, Makes Plans as th ro u g h w a lls o f b u ild in g s fo r v e s tib u le or lo b b y tra ffic . M ID D LE : This B a n k in g For A T M , POS Netw ork for Kansas lo b b ies ta in e d D ie b o ld Systems and u n it o th e r u n it security TABS T o ta l lo catio n s is r a t A support their ATMs even though they are not IBM 3614s, which Fourth Na tional will be using. Kansas law states that all off-premise ATMs must be shared with other banks. Fourth National is introducing the network to the Wichita metropolitan area this year but hopes to expand it to other Kansas markets in 1977 and eventually tie in with regional and na tional networks. Both the POS terminals and ATMs will be implemented through the use of one of two plastic cards. One will be Entrée, for use by customers wish ing to transact business through their deposit accounts on a nationwide, and even international, basis without the difficulties involved in negotiating per sonal checks. Entrée is National BankAmericard’s debit card. * * MID-CONTINENT BANKER for April, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis chine d u rin g is d e s ig n e d b a n k in g to fo r w h e re use in self-co n a fa c to r. B O TTO M : This D ocutel T4 ta b le to p NETW ORK of ATMs and POS terminals will be established in the Wichita, Kan., metropolitan area this year by Fourth National. At a series of meetings held for cor respondent banks recently, Fourth Na tional outlined the basic structure of its network. By August 1, the bank will introduce its debit card and install four ATMs in its own facilities as well as eight POS terminals in merchant loca tions. By the end of 1976, the bank will install an additional 22 POS terminals and in 1977 it will install six more ATMs in off-premise locations as well as an additional 75-100 POS terminals. The bank plans to offer its down stream correspondents full participation in the POS terminal network and will A u to m a tic is d e s ig n e d service hours, ta k in g M oney M a custom er trc ffic lo a d lo b b y o ff te lle rs . Pomt-of-Sale Equipment Elcom In d u s trie s , St. Looiis, m a rk e ts this cred it a u th o r iz a tio n te r m in a l to speed up a u th o r iz a tio n p ro c e d u re s a t re ta il o u tlets . U n it e r a te d by clerk, u tiliz in g custom er's c a rd , and trig g e re d it by respo nds w it h a u th o r iz a tio n a u d io cen ter. is o p p lastic m e ssa g e U n it can serve as g e n e r a l p u rp o s e p h o n e. 55 12 Arkansas Banks Join A TM Netw ork r\ i i i / Developed by Commercial Nat I Bank W ELV E Arkansas banks are par ticipating in a statewide ATM net work, called the Arkansas Bank Inter change Group, developed by Commer cial National, Little Rock. Customers of all participating banks can make deposits or withdrawals from checking or savings accounts or transfer money from one account to another on the machines of any of the participating banks. Out-of-town customers can with draw as much as $100 from checking accounts. The system is made possible because all participants are using Diebold TABS units. Each participating bank designed its own debit card, but the encoding and embossing for all cards is done in Little Rock under the direction of Commercial National. The interchange evolved from the work of a task force established by Commercial National in 1974. The con clusion of the task force was that the future trend of banking convenience in Arkansas would best be served by a T G o o d fo r c a s h a n y t im e , a l l over A rk a n s a s . state-wide debit card system. Commercial National selected ATM units and worked out the bugs in the system before offering it to its corre spondents throughout the state. The bank set up a card system that could be used interchangeably between all participants and worked out a market ing program that was offered to each participant as it entered the inter change. Commercial National assists partici pants in the following areas: decisions as to which customers should receive cards; designing cards; working out problems of costs; capital investment, including leasing, to solve investment problems of smaller participants; pro gram selling aids; employee training for selling the service; and support for local advetrising efforts. * * EasvCheck a Nov- í C w m B Í Mattonai EasyChcek (4»*» cmi te» y»ti gi« cash «sato® te áw daÿat ns<ßtin d i» m m 4 * Mu. Wete pkmd to announce the formahon of the¡ ■ Artes-«s Sank Sntechèmge Group." We've.»snedhandsvidi) leadingissatethooujjfcuf thè -da»whfcb haee aníomaíic tete) machines ititentote io CNBs báteteOH24i te pnsste' bank«Monte»ibis gut noti-«vie®, Fot esesmfsfe, sìoutEasgOseok¡steste» osici Works iost ttw sanse«ssa aseste;«terete nuroiotec tetes«ssisdoes ttetet EassSank 24, Ano a < 1 ¡« oan $si «ashas^Srne* LiSteRsxk... or menyothes eisìes. And Sai »fu®tbetegkitons li: thè rate i‘\v monti» otite) banksolii te jatstig dseatesino Nosevotecan tte cashanytte» voci ì testoi, citi osee/«te»teak wsthyowCs neo o N -’ -m ! wX'-onfi)/■«'/, caref risai someth«'«! Oteesosmite c-bastii Ad ann ounces e x p a n s io n o f C o m m e rc ia l N a t'l o f Little Rock's d e b it card service to s ta te w id e basis. . 9^ 3 & tei«"’ rv ^ _\oS ° \ÿ id «bnf - L oó V ' 9 ve 0oí-a V ' j\ i°v V teO*'l'co „ SW wA° ,ò®XV .teoS\o»G'C'e * At e C o 'V òte<sS° 0ov" V ; X O®'. , xo ° x Ae-d A o' 56 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 1976 Our idea of correspondent banking THE COMMITTEE OF ONE. Our people are real, live, experienced correspondent professionals, with years of correspondent banking behind them. So, since they aren’t shiny new management trainees or just goodwill ambassadors, they have the authority to okay loans or services on the spot. Without going through a committee. WE CALL YOU BY NAME NOT BY PHONE. Because we work person to person, eye to eye, with the management of every corres pondent bank, right there at the correspondent bank, things get done faster. Friendlier. WE'RE THE BANK FOR THE NEW DOWNTOWN. NBB is the biggest bank on Michigan Avenue. The hub of Chicago’s new changing skyline. But we’ll extend the New Downtown to wherever you are. WE’RE BIG ENOUGH TO SERVE YOU, BUT SMALL ENOUGH TO TAKE CARE OF YOU. That’s why we can give you literally dozens of services. Like loan participations. Bond portfolio analysis and advice. Safe-keeping of securities. Credit information. Use of our computers. Executive search. And more. It’s all part of being whatever kind of bank you need us to be. BANKER TO BANKER. NOT BANK TO BANK. The bank for the New Downtown NATIONAL BOULEVARD BANK OF CHICAGO 400-410 North Michigan Ave., Chicago, 111. 60611 MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Phone (312) 467-4100 Member FD1C One Card Accesses Various ATM Brands :u A te c h n o lo g ic a l p ris in g th e o f w h ic h a c h ie v e m e n t M o n e y c a rd can on th e electro n ic be accessed p a rt of b a n k in g w ith th e sam e ATM m a n u fa c tu re rs system in A rk a n s a s plastic c a rd , to ac c o rd in g p e rm its use to any th e 12 b ra n d l .-l -' b an k s of First A rk a n s a s com ATM, a ll B ankstock C o rp ., HC w h o s e le a d b a n k is W o r th e n B a n k, Little Rock. Jack F leis chaue r, M o n e y c a rd d ire c to r, is sh o w n in s e rtin g a M o n e y c a rd in to a D ocutel u n it a t W o rth e n B a n k. The sam e c a rd w ill also a c tiv a te a d ja c e n t M o s le r (c.) a n d system g r e a te r f le x ib ility in e q u ip m e n t O ieb o ld selection (r.) units. M o n e y c a rd and m a n u fa c tu re rs c o m p lie d , m em ber a c h ie v in g b an k s w a n te d success in customers throughout the area the op portunity to participate immediately in the system. An additional option will offer access to savings accounts by customers of participating banks if the banks elect to utilize C&S’s automated savings ac counting system. The franchise does not require par ticipating banks to have or install their own ATMs, but C&S will assist in ac quiring units for participants, if they desire such assistance. The cost of the franchise is made up of three elements— a flat fee for the annual use of the franchise, a fee per key card issued and a fee per transac tion processed through the C&S ac counting center. The franchise is marketed through C&S’s correspondent bank division. * * an a r e a b e lie v e d to h a v e b ee n som e tim e a w a y fro m so lutio n. Instant Bank Key Transaction Card Plan O ffered in Southeast by C&S, A tlanta BAI Discloses Improvement In Overall Check-Processing For First Time in Five Years ITIZENS & Southern National, At lanta, is franchising “Instant Bank Key,” a banking transaction card, to any bank in the Southeast that uses or elects to use C&S’s on-line DDA service. The card enables customers of a participating bank to handle checking account transactions in automated teller machines. Under the franchise arrangement, each participating bank issues plastic “Instant Bank Key” cards to its check ing account customers. Regardless of where the customer’s bank is located, he will be able to use his card at any “Instant Banker” location on a 24-hour basis to make withdrawals or deposits to his checking account at his own bank. At present, there are 53 “Instant Banker” locations in Georgia, with more projected for the near future., Under the franchise agreement, each “Instant Banker” is identified by the “Instant Bank Key” emblem displayed by participating banks. As additional banks in Georgia and other south eastern states come into the system, they will provide access points for the customers of all participating banks, thereby giving those banks and their Remote Units Termed Branches A federal appeals court in Washington, D. C., has upheld a ruling by a federal district court that remote terminals in stores and else where are branches and thus come under state branching statutes. According to the ruling, national banks cannot install remote hook ups in states not permitting branching or that have not enacted en abling legislation to accommodate such hookups. The ruling is a victory for the Independent Bankers Association of America, which filed the suit that prompted the ruling after Comp troller of the Currency James Smith advised national banks that they could install remote hookups because he didn’t consider ATMs and POS terminals to be branches. The general consensus is that every remote terminal proposed in states permitting branch banking will have to be approved as a branch by state authority—an involved process. 58 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PARK R ID G E, IL L .—The nation’s check-collection system has shown an improvement in overall check-processing operations for the first time in five years, according to the Bank Adminis tration Institute. In the March issue of its M agazine o f Bank Administration, the BAI reported the following performance improve ments in 1975 by 164 responding banks over their performance in 1974: • Average reject rates decreased from 2.8% to 2.6%. • Average transit-return rates de creased 9%. • Average rate of free and lost items discovered decreased 8%. • Average rate of mis-sent and mis coded items discovered decreased 17%. • Average rate of exception and re turn items decreased 10%. • About 78% of outstanding excep tion item dollars were open less than 30 days, compared to 68% in 1974. • Average transit holdover rates de creased 15%. • Overall labor productivity in creased 12%. While the rate of exception items has been reduced, the BAI says, the com parison with 1974 revealed an increase in the outstanding dollar value from $213 million to $401 million. The complete report, "1975 Check Collection Survey,” will be released sometime this spring, the BAI has in dicated. MID-CONTINENT BANKER for April, 1976 "This check has already converted more than half of our line check customers to personalized checks, and the orders are still coming in” H. Eugene Renno, Vice President Georgia Railroad Bank Augusta, Georgia “The year before last we sent most of our line check users a trial order of scenic checks, hoping to convert them to personalized checks. The results were good, but we still had a substantial line check expense each month. “Then, last year, our Harland Sales Representative suggested we try again, only this time use the new Prestige Check from Harland. We did, and were very glad we did. “Of the 6,000 line check users who received the Trial Intercept Package of Prestige Checks, more them half have reordered the personalized checks in stead of their usual line checks. And the orders are still coming in! “The whole program has been a complete success. The savings to our bank have been significant, and our customers are happy. We’ve even had some customers come in and thank us for sending them the Prestige Check. “W hat it boils down to is a simple case of offering the customers what they want. If you do, they'll gladly buy it!’ A t Harland, we do more than print checks. We print good ideas. m H A R IA N O BANK STATIONERS. PO. BOX 13085, ATLANTA. GEORGIA 30324 MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 59 Kentucky Group Banks Issue O N E Card; Systemwide Use Scheduled by Year-End “NEW ERA in banking” has been introduced to central and south eastern Kentucky with the introduc tion of the ONE card by Kentucky Group Banks, according to A1 Florence, vice chairman, Central Bank, Lexing ton. The new banking card, which will be offered by all 18 member banks of the Kentucky Group by the end of the year, entitles checking account custo mers to a number of services new to the participating institutions. These in clude free notary service, instant ac count identification, instant balance ver ification, free traveler’s checks, monthly premium offers, automatic bill paying through check draft authorization and estate planning, according to a spokes man for Kentucky Group Banks. The group’s on-line system will even tually permit cardholders to have checks verified at local merchants and have the use of automated teller units located in member banks throughout the 25county area served by Kentucky Group Banks. Initially, cards were issued to person al checking account customers of Cen tral Bank, Lexington. However, cus tomers of the other 17 member-banks are expected to receive cards by the end of April. All cardholders will be entitled to free checking, plus the services listed above. Sometime in the future, they will also be entitled to travel discounts and assistance and life insurance equal to the amount on deposit in their regu lar passbook savings accounts. Each teller station at member banks will be equipped with NCR 279 units to provide computer entry. The units will give tellers the ability to produce instantaneous account balances for cus tomers, thus eliminating much of the time spent making phone calls to book keeping departments. Eventually, cardholders will be able to cash personal checks at any of the Kentucky Group’s 18 member banks and a market survey will soon be con ducted to test the feasibility of placing check guarantee machines at local stores, which will make it possible for a cardholder to have his check verified at stores throughout the Kentucky Group area. Totally automated banking will be available throughout the group’s trade A IF ONLY HIS BANKER HAD KNOWN! If only his banker had known, he w ould have in s is t e d on in su r ance a t th e t im e he granted a loan. Now, the banker's loan could be in jeopardy! When a loan is made, th a t’s the tim e to prote ct the borrow er . . . AND YOUR BANK! This is p a rticu la rly tru e of th a t BIG LOAN or th a t RISKY LOAN made to the sm all businessm an or the fa rm e r who may be un d e r-in sured. Reason: when som ething happens to th a t type of borrow er, the loan often becomes de linquent or unco lle ctib le . Our SINGLE PREMIUM TERM INSURANCE w ill solve your prob lem on those big loans. And, of course,_we have a fu ll range of c re d it life and other types of in surance th a t fit alm ost any lend ing situation. IF IT'S A BANK INSURANCE PROBLEM,CALL INSURANCE ENTERPRISES. Inc. 5811 H am pton St. St. Louis, Mo. 63109 314/832-2717 60 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis D ie b o ld 5 5 0 TABS units a r e p la n n e d f o r a ll K e ntu cky G ro u p b a n k s b y y e a r en d , b e g in n in g a t C e n tra l B a n k, L ex in g to n . They w ill p ro v id e 2 4 -h o u r b a n k in g services fo r O N E card hold ers. This NCR 279 u n it w ill be in s ta lle d at each te lle r s ta tio n a t K e n tu cky G ro u p b an k s to p e r m it e n try to o n -lin e EFT system , cut tra n s a c tio n tim e s . area before the end of the year, a spokesman said, when the installation of Diebold 550 TABS units is complete. All units will be installed in existing bank locations initially. Consideration eventually will be given to installations in shopping malls. The Diebold units will permit card holders to secure cash, make deposits to checking or savings and make transfers from savings to checking or vice-versa. Customers will also be able to ascer tain account balances through the units. The first units will be placed at Cen tral Bank and its branches, with subse quent installations planned for the oth er Kentucky Group banks later in the year. It is estimated that approximately 250,000 ONE cards will be issued by year-end. * * MID-CONTINENT BANKER for April, 1976 Four ways to make new customers out of old customers. STRAIGHT ALPHABETIC First N ational's Central Inform ation File (CIF) gives you fou r diffe re n t sales and service profiles of your customers to increase bank a ctivity. Straight A lphabetic — quick and MATCH - NO MATCH easy w ith ind ividual relationships tied together. M atch-N o M atch — merge tw o types of info rm a tion to p in p o in t w hich services a custom er does or doesn't have. Household Relationships — spells HOUSEHOLD RELATIONSHIPS o u t jo in t accounts, individual accounts, even children's savings. Households by Branches—for use in branch or area m arketing efforts. A ll of these profiles are broken o u t in an easy-to-reference paperHOUSEHOLDS BY BRANCHES base hard copy. And w ith them, your m arketing o ffic e r can better cross-sell bank services, your cre dit o ffice r has a fu lle r credit analysis and your operations o ffice r has one u n d u p li cated channel of com m unications. The cost fo r CIF is o n ly $5,000. Surprisingly low considering the am ount of data CIF references fo r your officers. If you'd like to know more about this com plete banking program, call either Herbert M. Richard son, Jr. or Jerry L. Fessel at 1-502-581-4200. FIRST NATIONAL BANK O F L O U ISV ILLE M em ber Federal D eposit Insurance Corporation MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 61 Five-S tate EFT Network Signs 150 Banks A fter Road Shows SE R IE S of “road shows” to explain A the concept of a proposed elec tronic banking system to be shared by banks in five states lias been completed by Financial Communication Services Corp. (F C S C ), St. Louis. As of mid-March, FCSC had signed 150 banks into the system, all of which are said to be located in the system’s major market areas. The network will encompass all of Missouri and Kansas and parts of Iowa, Illinois and Ken tucky. The system is expected to begin operations late this year, with the first installations expected to be in St. Louis; Kansas City; Columbia-Jefferson City, Mo.; and Davenport, la. FCSC is a not-for-profit corporation created to develop and operate an elec tronic consumer banking communica tions system for participating banks in the five-state area. The network will provide for automated banking facilities at retail merchant outlets and at free-standing “financial convenience centers.” The FCSC system is known as Bank- B a n k M a te is th e n a m e o f th e EFT system b e in g d e v e lo p e d b y F in a n c ia l C o m m u n ic a tio n Services C o rp ., St. Louis. This card custom ers o f p a r tic ip a tin g ATM a n d w ill be issued POS e q u ip m e n t. Mate. The name was chosen, according to FCSC executive vice president John G. Regan, after the establishment of favorable reaction to the name through a consumer attitude study, which indi cated that the public considers the name to accurately depict the service the system will provide. BankMate plastic debit cards will enable customers of participating banks to use the system’s electronic equip ment at remote locations. The card is designed in two shades ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ! FREE...6 issues of ! Doane’s Farming for Profit, ■ . | ^ Over 800 banks send this leading newsletter to farm customers each month. It’s filled with facts to help farmers boost income. They appreciate the information and the bank that sends it. There’s no better way to show you’re the ag bank in your area. Your attractive bank heading appears on each issue — and you get exclusive use in your trade area. EVALUATE FARMING FOR PROFIT. Mail coupon or your name and letterhead for six issues . . . Free. * YOUR NAME_____________________________ TIT L E ________________ ! BANK NAMF ________________________________________________ | A D D R E S S ________________________________________________ I C ITY _______________________________ S T A T E _________ Z IP________ ■ I*ARMING M )R PRO FIT... m ...a vital link between you and your farm community. 62 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to b an k s fo r access to Doane Agricultural Service, Inc. r W ' ,\ / \ I V I I T U U / M l t 8900 Manchester Road St- Louis, Missouri 63 144 (314) 968-1000 of green, each on a separate horizontal panel. The lower panel contains the card name, and space for embossed cardholder information. The upper pan el provides space for the name and city location of the participating bank. BankMate is said to be the first regional debit card system to be de veloped, and Mr. Regan stated that all banks, regardless of their size or EDP capacity, will be able to take part in the system. At one of the road shows, Bernard J. Ruysser, president, Commercial Na tional, Kansas City, Kan., said, “We see this system as the first really excit ing new service that we have had avail able to our customers in years. And we believe strongly that our customers will accept and use the service. Perhaps more importantly, if we banks don’t provide this service, someone else will.” When first installed late this year, FCSC ’s network will provide up to 30 “financial convenience centers,” which are free-standing structures with auto mated banking equipment available round the clock, and about 1,000 POS terminals. Customers of participating banks will be able to use the convenience centers to transact such bank business as with drawing funds from checking or savings accounts, making deposits, transferring funds between accounts, obtaining cash advances from bank charge card ac counts and inquiring into the status of various accounts. At the POS terminals, customer ser vices will include check guarantee, pay ment of goods through money transfer, charge card authorization, and inquiry into account balances. * * Women's C re d it Rights: V alley N a t'l Brochure Answers Financial Q ueries Valley National, Phoenix, has pub lished an educational brochure dealing with women and their credit rights and responsibilities. Entitled “Valley National Bank Talks About Women and Credit,” the 16page brochure addresses 20 of the most commonly asked queries about Regu lation B of the Federal Equal Credit Opportunity Act. It also provides infor mation about income, community prop erty state stipulations and marital status. There is no attempt to sell VNB in the booklet. The brochure has been offered free in all the bank’s offices. MID-CONTINENT BANKER for April, 1976 1 A U T O M A T I C COIN W R A P P E R 2 3 4 5 OLD S T Y L E COIN W R A P P E R Amounts and denominations autom atically in d ic a te d by Basic coin wrapper in extra strong kraft stock. Printed in 6 patented " re d bordered window s". A m o un ts in windows different standard colors to d ¡ffe re n itia te denominations. always in reg is ter. . . eliminates mistakes. Accommodates T rip le d e s ig n a tio n th ro ug h colors, p rin tin g and letters. all coins from lc to $1.00. Tapered edges. T U B U L A R COIN W R A P P E R 6 K W A R T E T COIN W R A P P E R Especially designed for machine filling . . . a real time-saver. Wraps 4 denominations in half size packages. A miniature of Packed flat. Instant patented “ Pop Open” action with finger the popular “Automatic Wrapper” . . 25c in pennies, $1.00 in tip pressure Denominations identified by color coding . . . 6 nickels, $2.50 in dimes, $5.00 in quarters. different standard colors. 7 F E D E R A L BILL S T R A P R A I N B O W COIN W R A P P E R Package contents clearly identified on faces and edges by color coded panels with inverted and reverse figures. Made Color coded for quick, easy identification. Red for pennies . . . blue for nickels . . . green for dimes . . . to indicate quantity of extra strong stock to assure unbroken deliveries. Only pure dextrine gumming used. and denominations . . . eliminates mistakes. Tapered edges. D U Z IT A L L COIN W R A P P E R 8 C O L O R E D BILL S T R A P Extra wide . . . extra strong. Designed for areas where halves Entire strap is color coded to identify denomination. Printed are wrapped in $20.00 packs . . ." re d bordered window” for am ount appears on top and bottom of package. Extra wide for marking and stamping. Extra strong stockfor safe delivery ease of identification. Accommodates $20.00 in dollars, $20.00 in halves. Tapered edges. and storage. Pure dextrine gumming. 9 BANDING S T R A P S Ideal for packing currency, deposit tickets, checks, e t c .. . . do not break or deteriorate with age. Size 10 x % inches and made of strong brown Kraft stock with gummed end for ease of sealing. Packed 1000 to a carton. SEE TH E C. L. DOWNEY YOUR DE A L E R COMPANY MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OR S E N D FOR FREE • HANNIBAL, S A M P L E S MISSOURI • D E P T . MC 63 MARKETING EFTS The Psychology of Convenience and Change ACH CHANGE in the payments mechanism causes bankers to be come increasingly worried about the allegiance of their customers. Take lock box, for example. Most people view the lock box as a direct outgrowth of the desire by corporations to better utilize their cash. Often overlooked, however, is the fact that corporations—long con cerned about their growing number of banks— also viewed the lock box as an opportunity to consolidate or reduce their banking relationships. Hindsight tells us that this change in the pay ments system caused a great shift in customer allegiance. Some banks gained corporate relationships because of their lock-box capabilities. Others lost busi ness. This concern by banks for keeping customers can cause some problems. Having been deeply involved in an other area of the payments mechanism, the charge card, I remember well the frustrations. The $64 question in the early days was whether the introduc tion of the charge card would cause customers to change their banking re lationships. Worrying about the answer to that question pushed many logicalthinking bankers into emotional re actions. Poor judgment became the norm rather than the exception as banks everywhere cut corners to get on the charge-card bandwagon. E By JACK W. WHITTLE Chairman The Whittle Group Chicago Now that we are entering a new era of electronic funds transfer, banks are again wondering about the effects on established customer relationships. Will customers switch to banks with E F T capabilities? If so, will big banks have an advantage over small banks? Or, will small banks still retain certain territorial rights because the basic law of customer relationships now is con venience of location? Basically, there is a built-in resistance to change. This applies especially to banking habits—particularly in smaller communities where research has shown that individuals and families tend to stay with the same bank year after C u sto m ers w ill h o v e to be e d u c a te d in th e use of ATMs a n d , once th e y g e t used to th e m a chines, th e y 'll n e v e r re tu rn to te lle r lines, if th e y have choice, acc o rd in g Jack W . W h ittle . 64 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a to year. Questioned as to why this is so, many inhabitants of smaller communi ties fall back on “but I ’ve always banked here” or “this is where my par ents banked.” In the Chicago metropolitan area, we discover that only 15% of the people change banking relationships during a given year. To be sure, about 25-30% change addresses, but the actual act of closing an account and opening a new one in its place elsewhere is not nearly so common, and when it happens, it usually is related to convenience. The most frequent reason people give for selecting a bank is conve nience. But with the advent of E F T S banking, the whole structure of con venience is about to change. Any stu dent of marketing will tell you that if someone can offer more convenience, a more easily accessible way for the cus tomer to obtain the product, people will usually gravitate to the newer sys tem. We proved it with drive-in tellers. Which leads me to conclude that if a person can bank at the supermarket without the additional chore of driving to another parking lot and waiting in another line, he most certainly will change. Admittedly, when established habits or behavior must be altered to gain more convenience, it may not be worth the effort. But research indicates that once people have tried and become used to automated teller machines (ATMs) and POS systems to transact banking business, they repeatedly will use this equipment because it is more convenient in terms of location and hours. Recently, while conducting a series of focus groups on people’s attitudes toward financial institutions, a woman made a comment I think is representaPrior to forming The Whittle Group, Mr. Whittle was a vice president and director of marketing at Con tinental Illinois National, Chicago. He is currently serving as treasurer, Bank Marketing Association. The Whittle Group offers marketing ser vices to the financial community. MlD-CONTINENT BANKER for April. 1976 It’s tim e you took a second look at K an sas B an k N ote Com pany. Take a look at savings. W ith the specialized equipment, the experienced management and staff we have at Kansas Bank Note, our prices are very competitive . . . lower priced than many. Our central location helps a lot on shipping too. All we ask is a chance to prove it. Take a look at quality. W e’ve been specializing in printing bank forms and checks since 1920 and experience has taught us that our customers deserve and get top quality all the way. The paper, ink, format . . . every thing is inspected and quality checked. W e’ll he happy to show you samples to prove it. KANSAS BANK NOTE has a brand new customer checkKANSAS BANK NOTE CDM PANY selection brochure. W e think it’s a knockout. Pages and pages of full color check and cover reproductions of every style and de We’re that Second Look. scription. With this marketing and advertising aid, you’ll know For your total you’re offering real quality at a price that you and your customers bank printing needs. will like. Give us a call. FIFTH & JEF F ER S O N STR EETS • MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FR ED ON IA. K A N S A S 6 6 7 3 6 • 3 1 6 -3 7 8 -2 1 4 6 65 "My a d v i c e t o s m a l l b a n k s is t o l e t t h e b ig o n e s t a k e a l l t h e l u m p s . L et t h e b ig b a n k s e x p e r i m e n t w i t h a l l k in d s o f s y s te m s a n d y o u can p l u g in l a t e r . " tive of many people’s thoughts in this day and age. She stated that not long ago, she went to her usual supermarket and there was a new savings and loan right in the supermarket. Her first re action was why is a savings and loan located in the supermarket? But after reflecting on this for awhile, she thought, “Why not?” On her next trip to the supermarket, she opened an ac count for her children with money withdrawn from her bank because she said it saves her time. As marketers of financial services, we should never forget that people basically are lazy and anything that can save them time usually wins their approval. This is evidenced by every thing from hot combs to electric garage door openers and helps explain why one out of every nine American fam ilies contracts with private firms for lawn maintenance. Time is the most valuable asset we have. Despite people’s preoccupation with time, the behavioral change in using an ATM is most severe. This is be cause it takes a function always per formed by the teller and switches the responsibility for the accuracy of that transaction to the customer. Once again, our research indicates that some people will read and study a behav ioral change and then buy it. These are what we call the “early adopters”; but, unfortunately, they represent only about 16% of the population. The rest of us require at least a step-by-step demonstration before we’ll try some thing new. For this reason, customers will have to be educated in the use of ATMs and POS systems. And to make sure they will agree to be educated in the first place, some sort of incentive—like cash or coupons, a drink of lemonade, a doughnut or a small giveaway—will be required to get people involved. After they’ve used it once and discovered they didn’t blow the computer or push the wrong buttons, they’ll become more confident. And as their confi dence grows, they’ll never again return to teller lines, unless given no other choice. People worry most about the first time use of the machine, but once they gain confidence, it’s like being part of the in-crowd. As they begin to use the ATMs more and more, they may even laugh inside and feel sorry for those people who still wait in lines and bank 66 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis during normal banking hours. They’re really saying: “Isn’t it too bad you don’t have the guts to try something new? Watch me use this machine. I ’m superior in knowledge and am basical ly a progressive person.” A recurring theme we often hear in our research is that people like the idea of controlling the transaction themselves. Certainly, there are linger ing doubts, but surprisingly, the anxi ety level can actually be red u ced by using a machine. With a human teller, there’s always the fear after presenting a check of: Where’s she going with it? What records is she looking up? Is she calling someone to verify whether I am a good person? The machine allevi ates these kinds of fears by making the transaction impersonal. People who are concerned about their involvement with other people in their personal money matters (most of us fit in this mold, by the w ay), having overcome the educa tion barrier by using a money machine, will time and time again come back to it. Even so, it will be a good many years before the majority of your cus tomers use ATMs because resistance to behavioral change is great. But unless you get cracking on E F T S now, you’re in for some real trouble. Good market ing counsel can help overcome some of these behavioral changes, and banks will have to learn they cannot market E FT S like other products. Most banks have a great deal more to learn about their customer bases before they make the far-reaching decisions as to equip ment and locations. My advice to small banks is to let the big ones take all the lumps. L et the big banks experiment with all kinds of systems and you can plug in later. But now is the time for small banks to es tablish within their markets some sort of clear relationship to the future E F T S environment. They should develop the behavior pattern of having their cus tomers use some sort of card clearly identified with their banks. It need not be plastic nor even functional. But, the point is that within 10 years, most of us will transact our banking with cards. When customers reach in their wallets for those cards, you’ll want them in the habit of pulling out your card and not your competitor’s. Secondly, all banks must concentrate now as never before on increasing market share. This means stealing cus- tomers from the competition and tight ly locking them into your bank so they’ll never leave. In the era of E FT S, convenience no longer will be a factor in selecting or switching banks. Be cause all banks will be equally con venient. And then the ball game changes. Market share will become “frozen.” It’ll become difficult to ac quire new customers, so you had bet ter get as many as you can now. Third, don’t just “wait and see” or, worse yet, become a holdout. Because when the E F T S dam breaks, there’ll be no turning back for any of us. When consumers, corporations and govern ment bodies start to get really turned on to the electronic payments mecha nism, the process of conversion will ac celerate. To be in a position to take maximum advantage of the oppor tunities, learn all you can now. I’m constantly amazed at the num ber of bankers who still think E FT S won’t ever happen. Also, that many banks have refused to become mem bers in cooperative ventures like auto mated clearing houses. I hope this changes—and soon. To develop a repu tation of non-cooperation or resistance to progress may be suicidal. It’s very important that your customers perceive your bank to be involved in the E F T S movement today if you expect to keep them tomorrow. You can get much more recognition and achieve a higher level of awareness on a cooperative basis than you can ever get going it alone. Finally, E FT S will quickly blur the distinctions between all financial in stitutions. Smaller banks can no longer afford to be all things to all people. It will be important for these banks to carve out a niche in the market and then reinforce their claim on that po sition through creative execution and a consistent program of communication. By gaining a foothold now, when large banks enter local markets via E F T S— as they surely will—their im pact can be minimized. Assess your major strengths and communicate them to your market. Correct your weak nesses. To be successful in the era of E FT S, your institution must be con sistent in everything it does. Consisten cy is based on a sound rationale of what your institution is and what it is trying to become. Above all, it requires a management that’s brutally frank, with a strong commitment to change the institution to fit the demands of the marketplace. • • MID-CONTINENT BANKER for April, 1976 The Transit Manager. He found aw ay out o f the day-late, dollar-short dilemma. Dave has found a system th at provides more cash on hand for his bank through: Our A ccelerated D eposit Collection S y stem —The Northern Trust’s own d irect send program accep ts D ave’s unsorted cash letters later than most deadlines in Chicago and provides imme diate availability for many financial https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis centers throughout the country. Our A utom atic F u n d s P ro g ra m —a unique reporting system th at gives him today’s information today on available deposits. Our D eposit A nalysis S en d ee —a periodic, computerized analysis th at provides complete, accurate informa tion on the composition of deposits. End result: Dave has more money available to invest for more profit. You could too. Our Trial Cash Letter will help. To set it up, contact your Calling Officer at: The Northern Trust Bank, 50 South LaSalle Street, Chicago 60690. Telephone (312) 630-6000. The Northern Trust Bank Bring your financial future to us. Electronic Banking, Consumer Legislation Discussed at AMBI Credit Conference By JIM FABIAN Associate Editor LECTRO N IC banking and consum erism were two popular topics at the recent consumer credit conference sponsored by the Association for Mod ern Banking in Illinois (AMBI) in St. Louis. A panel on electronic banking, mod erated by James E. Brown, president, Mercantile Bancorp., St. Louis, fea tured Sean Millin, vice president, In terbank Card Association, New York City; Larry D. Wright, vice president, First Galesburg (111.) National; and Joel Crabtree, vice president, Continental Illinois National, Chicago. Mr. Wright presented his bank’s au tomated teller machine (ATM) track record. With two units, the bank has succeeded in taking in $326 in deposits for every $1 withdrawn. He reported that a local survey revealed that 93% of the general public knew what an ATM was, 87% associated the units with First Galesburg National and 32% of households in the community have access cards to the machines. In ad dition, he said, from 6% to 13% of the customers of competing banks in the community have access cards to First Galesburg National’s ATMs. (See ar ticle on page 72 for more of this bank’s ATM track record.) Mr. Millin said that the plastic card is the key to any check authorization system. He said any successful debit card E must have uniformity with a nationally recognized logo, such as Master Charge; it must be easily usable at all terminals and it must be secure. He said that retailers are not geared to the banking system’s magnetic stripe cod ing system yet. The debit system, he continued, is designed to act as a highway between various local or regional systems, not to conflict with them. Mr. Crabtree said convenience is the most important criterion when a cus tomer selects a bank. He spoke of Con tinental Bank’s 60 POS machines in use in Chicago, which average half a mil lion transactions per month. He said that cash withdrawal is going to be added to the services available through the units. The bank’s seven ATMs average $2.5 million in transactions per month, he said, with from 90 to 110 machine transactions for every 100 cards out standing. He also said that ATMs can replace tellers economically, according to pre liminary tests, and he predicted five na tional debit card systems within five years to serve the banking, thrift and credit union industries. He also predicted the possible retire ment of Continental’s own debit card within two years in favor of a national debit card, such as Signet, which will be initiated by Interbank Card Associa tion in 1977. He said the greatest growth in a debit card system will occur after the system becomes linked with a national network because the consumer thinks a national network is better than a regional system. James A. Matthews, chairman, AMBI consumer division, and vice president, Continental Bank, Chicago, spoke on the topic of consumerism. He said that much of the consumer legislation being enacted reflects the public’s rapidly changing attitude. He said the reaction of banks to consumerism is too often a knee-jerk instead of a rational response. He said bankers should ask them selves if the consumerist movement was fomented in any way by disappoint ment with the way bankers promote their services. They should ask them selves if they promised too much and couldn’t deliver to the public’s satis faction, he said. He said that legislators do not be lieve banker predictions regarding the adverse effects consumer legislation can have. The Real Estate Settlement Pro cedures Act (RESPA) was a prime ex ample. He pointed out that Congress can act swiftly to tone down legislative overkill, as it did in the case of modify ing RESPA recently. He said Congress acted swiftly because it feared the con sequences of delay. He indicated that consumer credit could dry up if legislation becomes overly restrictive. But if it does, he said, the public sector will take over the consumer credit field. He called on bankers to work to re gain their lost credibility with both the public and legislators. “W e have cried Yvolf’ too many times,” he said, “be cause our dire predictions have not come to pass.” He said bankers should appeal to the economics of a situation, not the emo tions. They should have reliable cost figures to support their arguments. They should find better ways of de livering consumer credit services with out violating the basic rules of lending. New BAI Publication Gives Job Descriptions P a rtic ip a n ts on EFTS p a n e l a t A M B I consum er cre d it co n feren ce w e r e (fro m p res., M e r c a n tile I.) Jam es E. B ro w n , B a n co rp ., St. Louis (m o d e r a to r ); S ean M illin , v .p ., In te rb a n k C a rd A ssn., New Y o rk C ity; Larry D. W r ig h t, v .p ., First G a le s b u rg (III.) N a t'!; a n d Joel C ra b tr e e , v .p ., C o n tin e n ta l B a n k, C h ica g o . 68 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Bank Administration Institute has published Jo b D escriptions for Bank Personnel: A C om prehensive Guide, a 300-page soft-cover book de signed as an aid to personnel officers and employees. Primarily a reference book, Jo b D e scriptions is to be used in writing, add ing to, refining or changing the style or format of job descriptions or rear ranging the responsibilities of some existing positions. The publication contains a combina tion of job descriptions, specifications and management guides representing 32 different division, department or banking functions, reflecting about 137 “key” officer and nonofficer positions. MID-CONTINENT BANKER for April. 1976 It takes more than four pretty faces to give you fast decisions https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis It takes people who know banking like your bankers from Boatmen’s. They are trained to give you the assistance you need. Naturally, some situations arise that require special technology. Your banker from the Boatmen’s will draw on the knowledge of a marketing specialist, bond specialist or a computer technician, whatever is necessary. In reality, Boatmen’s staff is your staff, ready to assist you in any of your banking needs. Fast decisions? Usually. Knowledgeable decisions? Always. Call our Correspondent Banking Division at 421-5200. We’d welcome the opportunity to show you. Member Federal Deposit Insurance Corporation. THE BOATMEN'S NATIONAL BANK OF ST. LOUIS FIRST NATIONAL CITY TRAVELERS CHECKS cOSTOAf^ S- ? SAVE U P TO 96%O M ***( USO^vi i -1 1 ; https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 1976 Ifs unique. Its proven. If II bring in new customers fo r all your services. And you sti 11 receive your full regular commission •499*340 f ir s t ' n a t io n a l mm y«**« > c it y A» b a n k m & é i mu* ^ T W E N T Y D O llA R S ! . ■ ...... ' : iîS 000«*Q0QS*î • ' •' ?«. 5». *39 31*0** Km jt customers can buy up to /orth o f First N ational City Travelers Checks fo r only a $2 fee. Its a blockbuster event your custom ers look for and take adva n ta g e of. W hich means lots of tra ffic and profits fo r you. W e ll be te llin g the Big M ay Sale story, and supporting you, w ith an advertising program that delivers over 245,000,000 selling messages in May. It includes our biggest TV cam paign ever, w ith com mercials on netw ork TV hits like A ll in the Family, Barnaby Jones, Rockford Files, NBC Saturday N ight M ovie, and m any more, plus coverage of national and international auto racing events. We're also backing you up w ith a dynam ic a d vertising cam paign in Sunday Newspaper Supple- ' ments for m a xim u m local im oact and im m ediate sales results. There's even a local prom otion kit that takes the excitem ent of our national program and puts it right into you - institution. First N ational City Travelers Checks alw ays give you and your c js romers something extra W hether it's thousands more on-the-spot refund locations or this Big M ay Sale. Don't miss the Big M ay Sale's big opportunity fo r sales a n d profits. If you aren't a lready seliing First NoJional City Travelers Checks, w rite im m e d ia te ly to Citicorp Serv ices, Incorporated, 399 Park Avenue, N ew York, N.Y. 10022, or cal! collect (212) 559-0542. A nd w e ll rush to you all the materials you need to make M ay f he start of something big. FIRST NATIONAL CITY TRAVELERS CHECKS MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 71 How a $90-M illion Bank Made It W ith ATMs; Track Record Reveals EFT Success Story HY AND HOW would a $90-million bank embark on a completely internal automated teller machine (ATM ) program? These questions are continually being asked of us, along with one other—What results is the op eration getting? The operation was initiated to gain valuable expertise prior to the full blown arrival of E F T S and to prepare bank customers for electronic banking. It was also initiated to get new busi ness. Results have exceeded our expecta tions. Take a look at the accompanying table, which shows that First Galesburg National has seen significant increases in its penetration of the local checkingaccount market since installing its first ATM unit two years ago. The bank has captured 56% of all accounts opened in its trade area in the past six months and 50% in the past year. This gain has been at the expense of other local banks. Galesburg cannot be classified as a growing city. In fact, it has been losing residents over the past 10 years. The average age of residents is among the highest in the state, thus, the market is conservative. The competitive situation is such that in 1972 three of the four banks introduced a program of no-service-charge checking and free checks. When implementing our ATM opera tion in late 1973, it was not our inten tion to make the program a “marketing gimmick“ or the “latest thing to do.” Rather, we intended to expand upon the program while challenging our selves to accurately measure the results. We were convinced that only through such a process could we be in a posi tion to measure and forecast the impact of E F T on the bank’s future. The re sults to date not only have met our greatest expectations, but point toward a bright future for the bank. First Galesburg National’s assets were $67 million when the decision was made to introduce the ATM ser vice. This midwestern Illinois com munity has a population of 38,000 and W 72 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By LARRY WRIGHT Vice President First Galesburg National Bank Galesburg, III. is serviced by three other banks with year-end 1975 assets of $48 million, $36 million and $7 million. The com munity also supports two S&Fs, each listing assets in excess of $100 million, and five active credit unions, two of which have branches complete with drive-ups. The decision to install the first ATM was made due to: • The need to offer a service that could compete in a restricted environ ment. • The fact that account growth would justify the cost, with all installa tion and start-up expenditures being re covered within a three-year period. BANK PEN ETRATIO N • The need for the bank to prepare itself for E FT . Being in a unit-banking state, it is necessary for the bank to serve all cus tomers from the Main Office and a drive-up facility just 1,500 feet away. The bank felt it was imperative to offer customers convenient banking hours geared to their life styles, rather than requiring them to conform to hours set by the bank. It was also our intent to provide current and potential customers with a worthwhile service that could not easily be copied as a “me too” ser vice by our competition. Since the in stallation of our ATM, two competing banks have extended their drive-up hours (one is open until midnight) to attempt to neutralize the effect of our ATM operation. We have been critical of bankers who sit on their laurels, watch the crea tion and development of projects and decide at the twilight hour to jump in because it appears to be the thing to do or because their customers demand it. This can meet with disastrous re sults, i.e., charge cards, leasing, REITs. It was management’s decision not to take the sometimes costly “wait and see” attitude that is so typical of our industry. Management also decided not to introduce a full-blown program, but to systematically establish expertise in - % HOUSEHOLDS FIR ST GALESBURG PERSONAL LAST 6 6 ACCOUNTS OPENED: N ATIO N AL MONTHS MONTHS - 1 YEAR BANK A BANK B BANK 56% 19% 19% 50 13 19 19 6% 1 -2 YEARS 42 27 22 9 2 -5 YEARS 37 20 32 12 C h a rt sho w s t h a t First G a le s b u rg t ra tio n ( III.) o f th e ch e ckin g -a c c o u n t m a rk e t N a f'l has e x p e rie n c e d since in s ta lla tio n has secured 5 6 % o f a ll n e w accounts o p e n e d in p a s t y e a r. G a in has com e a t e x p e n s e o f local c o m p e titio n . s ig n ific a n t increases o f its first A T M tw o six 50% m onths and C in y e a rs w ith in its pene ago. B ank th e past MID-CONTINENT BANKER for April, 1976 When you need a helping hand, try one of ours. Our staff of professionals is ready, willing and able to provide you and your banking customers with a full range of correspondent banking services. • Clearings • Loan Participations • Demand D eposit Accounting • Bond Portfolio Analysis • Federal Funds • Automated Savings and C/D Accounting • F u ll Data Processing Services So if you have a financial problem, big or little, . . . don’t hesitate to call for help. Contact Earl Lassere, Vice President and Manager, Correspondent Bank Department at (713) 225-1551. Bank of the Southwest 91 0 Travis Houston, Texas 7 7 0 0 2 MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M em ber Southwest Bancshares, Inc. M em ber F.D.I.C. 73 the field at the grass-roots level. To analyze the cost of the program, the following basic procedure was uti lized: • The bank outlined all costs relat ing to the program for years one through seven. • By referring to the Fed Functional Costs Analysis, we determined the net worth of DDA and savings accounts and then established our goals as to the number of new accounts necessary to cost-justify the expenditures. In May, 1973, the decision was made to undertake an ATM operation that we considered feasible and profitable and to introduce this program on an internal basis. All receipts, envelopes, card designs, mailers, computer pro grams and marketing were designed inhouse. The only external procedure is embossing and encoding plastic debit cards. The program was introduced through an IBM 1240 computer and it was not necessary to establish a cen tral information file. At present, the bank is operational on an IBM 360/30 and is continuing to operate off-line. In November, 1973, the first ATM unit (a Docutel T3 Total Teller) was set up for demonstration purposes in the main lobby. During a 60-day pe riod, more than 10,000 demonstrations were given to customers. Much of our success in the program is attributed to this demonstration period. This phase of the introductory period was heavily advertised and resulted in the acquisi tion of numerous accounts from our competitors. In January, 1974, the unit was per manently installed at the bank’s drivein to provide 24-hour accessibility. We were aware that the location was less than desirable. Traffic in the area is minimal, the site is adjacent to an apart ment house filled with retirees, an abandoned filling station and a whole sale parts house. The manufacturer of the equipment projected that the ATM would not average 300 transactions per week during the first year of operation. However, within 90 days of installa tion, the unit had reached the 300-perweek usage level. We credit the immediate acceptance of the ATM to two things: • A lengthy and well-advertised demonstration period. • Mass issuance of private-label debit cards 10 days prior to the instal lation of the unit. Customers qualified for cards if their accounts met the following criteria: • A DDA account that had been on the books for a minimum of six months, maintaining an average balance in ex cess of $100 with two or less overdrafts and no returns. 74 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • A savings account on the books for a period of one year or more and maintaining an average balance in ex cess of $250. Although operating off-line, the bank suffered less than $300 in losses during the first year, based on the above cri teria. At the end of that year, the orig inal ATM was chalking up 600 transac tions per week, with deposits exceeding withdrawals by three-to-one. We re ceived inquiries as to when a second unit would be installed. We decided to install a second ATM at a more convenient location in 1975, even though there was little doubt that a suit would be filed by the banking commissioner once the unit was in place, because of the site chosen— a shopping mall some distance from the bank. The decision to further expand the ATM operation was based on the fol lowing points: • Our internal marketing research indicated customers would not only use, but would welcome, a second and more conveniently located unit. • A review of our original objectives as they related to account growth re quired for cost justification determined that during the first year of operation these objectives had not only been met, but exceeded by more than 100%. • Management was determined to further develop the bank’s expertise and technical advantage over competi tors while continuing to prepare for E F T in a systematic and orderly fash ion. The second ATM unit was installed in October, 1975, in Sandburg Mall, a 52acre development that draws customers from a multiple-county area. It is lo cated in the most concentrated residen tial area of the county. Following the installation, debit-card applications increased 200% and have continued at this pace. Within 90 days, the mall unit was averaging 300 trans actions per week, with dollars deposited exceeding withdrawals five-to-one. As a small bank located in a non metropolitan area, First Galesburg Na tional felt it was imperative that re sults be measured. To accomplish this, an outside research firm was employed to complete a survey of our market area in regard to quality of service and mar ket penetration. Survey results relating to the ATM operation included the following: • 93% of randomly selected respon dents were aware of the ATM opera tion. • 87% associated the operation with our bank. • 32% of the households in Gales burg maintain debit cards. • While 63% of our own customers had cards, from 6% to 13% of our com petitors’ customers also held cards at our bank so they could use the ATMs. • 36% of the households in Gales burg with incomes of $25,000 had cards. • Our bank’s penetration of new DDA accounts increased from 37% to 56% since the introduction of the ATM operation. • 16% of the new DDA accounts and 20% of the new savings accounts came from competing banks. Why is a $90-million bank located in a community of 38,000 so involved in E F T ? Our primary objective was account acquisition and retention through an established and profitable service. It is our opinion that E F T is a viable and necessary service. It was not our decision to “wait and see” but to develop expertise and a customer base that will be prepared for E F T when it comes. • • Editor’s note: First Galesburg Na tional has developed an Electronic Teller Program Installation Manual of 275 pages that tracks the bank’s ATM operation through market anal ysis, cost justification, installation procedures, off-premise ATMs, re sults, etc. Copies are available from the bank through Mr. Wright for a fee. Do-iT-Yourself A TM Display Sells Service to Customers It was “show and teller” time recent ly at all branches of Cleveland Trust as the bank presented its customers with a demonstration of its Docutel Total Teller machines. The presentation was designed to help prospective customers discover how easy it is to operate the machines. The display simulated the operation of the equipment, which the bank has named “Fast Cashier Bank-in-a-Box.” An invitation to a do-it-yourself dem onstration attracted attention to a color ful panel mounted in an aluminum floor stand poster frame at each of the bank’s branches. A replica of the Bank-in-aBox had all the features clearly identi fied, and all 10 functions of the Total Teller unit were explained. A movable wheel caused the correct instructions to appear in the Bank-in-aBox window so a customer could follow any transaction from start to finish by rotating the wheel and watching the information appear on the face of the model as it does on the actual machine. When a person decided to apply for a free Fast Cashier card as a result of the demonstration, applications were readily available from a nearby display. MID-CONTINENT BANKER for April, 1976 “If there were any other way, we would have taken it, but our attorney recommended we file bankruptcy. That includes what we owe on the family room. There’s no way in the world we can pay back the loan.” Bankruptcies are skyrocketing. And so are losses from unemployment, divorce, and extended illness. Cover your home im provem ent loan portfolio today with profitable, guaranteed protection from Insured Credit Services. As the w orld ’s largest private source for HIL credit loss insurance, w e’re currently working with over 1,000 leading banks. Call or write William F. Schumann, President, for details. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The 'Seller' Rule: A New Quandary for Lenders N O T IC E Any h o ld e r of this con sum er cred it tra c t is subject to a l! claim s a n d con defenses w h ic h th e d e b to r could ass ert a g a in s t the seller o f g oo ds or services o b ta in e d p u r su a n t h e re to or w ith th e proceeds h e re o f. R e covery not h e re u n d e r exc eed a m o u n ts by th e p a id by d e b to r th e shall d e b to r h e re u n d e r. HIS NOTICE may have to be printed in most consumer loan con tracts if a proposal published by the Federal Reserve Board becomes a regu lation. Last year, Public Law 93-637, the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, became law. Under Title II of that act, the Fed must substantially duplicate the trade rules of the Federal Trade Commission (F T C ) unless the Fed finds that prohibited acts are not unfair or deceptive as conducted by banks. Last November, the FTC published a final regulation entitled “Preservation of Consumers’ Claims and Defenses.” This rule, which takes effect May 14, 1976, makes it an unfair or deceptive act for a seller to take or receive a con sumer credit contract which fails to contain the above notice. It also makes a seller unfair or deceptive who accepts as payment for such sale the proceeds of a purchase-money loan which does not contain the notice. The FTC also proposed an amendment, to take effect on an undetermined future date, which requires the notice to be in contracts associated with purchase-money loans as defined. Thus, under Public Law 93-637, the Fed has published its no tice asking for comments concerning the F T C ’s amended rule, to determine if the rule also should apply to banks. Since the publication of the “seller” rule, bankers have been concerned about the rule’s impact upon their ac tivities in the indirect financing of autos, home improvements and other goods and services, for the rule ob viously applies to all indirect financing. T 76 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis By PAUL J. PFE1LSTSCKER Vice President Continental Illinois National Chicago Because the degree of risk of loss is one factor in the makeup of price, along with the competitive environ ment, bankers are faced with a severe problem. How can a banker insulate his portfolio against increased loss which is quickly converted into in creased cost? It would appear that the suggestion by the FT C that the in creased costs be internalized will be unacceptable to most financial institu tions. With other cost pressures on net margins, bankers will search for other methods of minimizing the impact of the rule on the risk associated with remaining in the indirect financing business. For most markets which are current ly non-recourse, it has been suggested that limited recourse back to the seller, based upon the equity of the purchas er’s claim or defense, is one solution. This “solution” will probably not be the panacea in many situations. It will not necessarily keep the bank out of a court action, and in order for it to be viable, the banker will have to be com pletely satisfied with each seller’s busi ness practices and net worth. The ex amination of business practices may well have to exceed the handling of customer complaints and warranty work. Business acquisition practices, such as advertising, inducements and compliance with rules such as the FTC used-car rules, may be of equal import. Even though the banker may be satisfied with the business practices of a particular seller, the financial ability of the seller to survive a given number of recourse chargebacks will be highly important. In the case of auto dealers, for instance, strong manufacturer- and dealer-written warranties on new cars somewhat diminish the problem, but that is not the only product auto dealers sell. If the banker opts for limited re purchase arrangements as a solution, another uncompensated-for incremental risk may well be present. As a portfolio generated by a new dealer grows, the impact on the value of the portfolio by either a change in his business practices or a cessation of business may well be serious, particularly when one realizes that the incremental risk of loss is ever present until the last con tract is liquidated. It is understandable that the discus sion by bankers centers upon the pur chase of auto paper, for more bankers purchase auto-finance paper than other kinds, such as home improvement or other goods and services. While the considerations are probably the same in these kinds of paper, they may be even more severe because of the term of the paper. A lot of things can hap pen to a dealer and his business during the 10-year span of time of much home-improvement paper. Bankers who do little or no indirect financing can take little comfort over the prior decision to stay out of the indirect market. A quick reading of the Fed’s proposal may lead those bankers to believe, erroneously, that they re main unexposed to the problem of in creased risk of loss. As now proposed, the notice must be in all contracts used in connection with a purchase-money loan, defined as: “A cash advance which is received by a MID-CONTINENT BANKER for April, 1976 J f . ★ Give Am erica w h a t it w ants fo r 76: m ade-in-Am erica pewter. By international,by George! : INTERNATIONAL SILVER COMPANY The more you get into premiums the better we look. International Incentives A Division of International Silver Company Wallingford, Conn. 06492 □ Call us as soon as possible. □ Send cata log before we meet. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis America’s Bicentennial celebration presents you with a once in a lifetime opportunity to offer your customers authentic replicas of early American craftsmanship—fine pewter holloware from International Silver, These premiums of lead-free pewter are made with all the qual ity you’d expect from the leading manufacturer of holloware. Plus the fact it’s one of the broadest lines of pewter products around, including a commemorative Bicentennial plate. See the specialists at International Silver for help. Our half century experience in the premium field can make your promo tion truly revolutionary. .Title. NameCompany. Address— City_____ .State. .Zip. “For the time being, we expect savings flows into S&L’s to remain at a very high level; and savings flows for the year may not be too much below the (record level of last year!’ -FE D E R A L HOME LOAN BANK BOARD https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis “With savings up, investors have to get money out. L ets go with conventionals and MGICs secondary market.” https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Today, experts in financial markets know you always check the largest, broadest m arket first. T hat is what M G IC s secondary m arket is. And now it can work for you better than ever before. At M GIC, we feel secondary m arket is so important w e’re calling this “the year of the secondary m arket’.’ And we are taking several m ajor steps to help you when you need us. They are: • Doubling our staff of secondary marketing special ists, already the largest in the industry, both at the hom e office and in the field. T h ese people are in constant contact with buyers. • Comm itting the skills and talents of our sales force of m ore than 1 0 0 representatives to finding investors who are ready to buy loan packages right now. • Increasing our counseling services. W hether you are large or small, you can now receive additional assistance or advice in getting negotiations started. You also get expertise on how to put together all of the docum entation to m ake your buyer’s decision easy. T hen there is the way in which we work with you —always with speed, reliability, and with your profits in mind. For these reasons we say —when it com es to m ortgage insurance there is no substitute for experience. M GIC experience. M GIC Because experience pays. Mortgage Guaranty Insurance Corporation, a Subsidiary of MGIC Investment Corp„ MGIC Plaza, Milwaukee, W1 53201 consumer . . . which is applied . . . to a purchase of goods or services from a seller who (1 ) refers consumers to the creditor or (2) is affiliated with the creditor by common control, contract or business arrangem ent” (emphasis added). Little guidance can be found in the proposal as to which contracts must contain the notice. If, unknown to your bank, a seller casually suggests to a customer that your bank is a good place to do business, must the notice be in cluded in the contract? Because the word “refer” is not defined in the pro posal, and other sources of interpreta tion are of little help, it is far from clear what conduct is intended to be regulated, and it is virtually impossible to discern what a creditor can do to stop seller referrals. Lacking a clear course of action, a prudent creditor may have to include the notice whenever an applicant in dicates that the proceeds of the loans will be used to purchase consumer goods from a particular merchant. That course is not without its pitfalls. What can a creditor do to limit his risk when a customer indicates he is purchasing the goods from a seller who the creditor knows is likely to misbehave? A second ..the double duty 24 hour depository Nightwatch. Meilink’s combination bag and envelope depository. On duty all night and day with unique security features that assure extraordinary protection. Resists “fish ing” and “trapping.” Carries the Underwriters’ Laboratories label. And exceeds specifications and requirements of the Bank Protection Act. Side-by-side hoppers provide flexibility and convenience. And Nightwatch’s totally mechanical operation has only three moving parts......eliminating gears, chain drive and power assist. Self-closing counter-balanced hopper door. Mortise cylinder type lock with replaceable core. Corrosion-resis tant, high-strength alloy and steel construction. Exterior finish of stainless steel plate. Receiving chests come in four sizes with custom sizes optional. Also available in bag drop only version. M eilin k ’s N ightw atch, th e d ep o sito ry that giv es y o u m o r e s e rv ic e a n d m u c h m o r e security! F o r details , call o r write. ’M e ilin h * Patent Pending B A N K E Q U IP M E N T ^ 3100 Hill Avenue, Toledo, O hio 43607 • Phone (419) 255-1000 80 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis part of that question ought to be, what can he do without committing trade libel? Because the F T C ’s seller rule and the Fed’s proposal offer virtually no guidance, these questions appear to be rhetorical—clearly not answerable now. The second part of the Fed’s pro posal may give the creditor a like amount of trouble. The phrase “busi ness arrangement” is defined in the pro posal as: “Any understanding, pro cedure, course of dealing, arrangement, formal or informal, between a creditor and a seller, in connection with the sale of goods or services to consumers or the financing thereof.” When a consumer finances an auto with a loan directly from a bank, it is not uncommon for the check represent ing the proceeds to be made payable to both the consumer and the dealer. In many cases, a special endorsement form is on the back of the check which, in effect, requires the dealer to list the bank’s lien on the title. Given the defi nition of “business arrangement,” is this the type of understanding, procedure, or arrangement which will place that loan under the proposal? Even if there is no referral, and the creditor would not recommend doing business with the dealer involved, following the accepted procedure of protecting a lien could place the creditor in a position of vir tually warranting the conduct of the seller, even though there is no formal mechanism to charge back the loan to the misbehaving dealer. Bankers choosing to remain in the consumer finance business, either di rectly or indirectly, will certainly be come well acquainted with their at torneys while trying to devise methods by which their portfolios can be in sulated from the increased risk of loss. Those bankers who fail to devise meth ods to minimize their exposure may have to look to the stiffening of credit criteria or increasing their interest rate for their solution. Those choosing the last two solutions will be contradicting the F T C ’s hypothesis that its new rules will neither increase the consumer’s cost nor decrease the availability of credit. * * Basketball Benefit: Bank To Give Proceeds Of Tourney to Charity Citizens Fidelity Bank, Louisville, has named the Old Kentucky Home Council, Boy Scouts of America, as the charitable organization that will benefit from proceeds of the bank’s 1975 Holi day Basketball Classic. The tourney generated $7,500 in funds for the American Cancer Socie ty’s Kentucky Chapter in 1974. MID-CONTINENT BANKER for April. 1976 At First National Bank of Kansas City, we offer a tradition of excellence. To correspondent banks. Retail and commercial customers. Investors. Since 1886 this tradition has been dependent on more than stately architecture and specific bank personalities. Excellence is built by a con sistent policy and commitment that permits the bank to grow with strength one generation to the next, no matter what the economic climate. The results are one of the largest capital structures in the region, a liquidity position re spected throughout banking and long-standing correspondent relationships. Our correspondent bank com mitments mean that we stand behind our customers through good times and bad. That our word is good. That our people you see today will be the people you see tomorrow. And that we nave a depth of staff so that more than one person can answer your questions without passing the buck. If you are looking for strength, dependability and experience in a correspondent bank relationship, you can expect all this as well as service and commitment from the First National Bank. It’s our tradition. FIRST NATIONAL BANK https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis An Affiliate of First National Charter Corporation. Member FDIC, (816) 221-2800 Extended Loan Credit Terms Make Appearance To Compensate for Higher Auto Prices ^T^HE ESCALATING prices of new autos are gradually being reflected in the granting of extended loan credit terms by banks. ih e Dyna Group Financial Center banks in St. Louis are offering 48month new-car loans to good credit risks. Banks belonging to the group in clude Hampton Bank, St. Louis; and Clayton Bank, Crestwood Bank and Ellisville Bank, all located in the St. Louis suburban area. For a limited time, the banks will extend 42- or 48-month terms to custom ers desiring $3,500 or more and who are AA credit risks and have been on the same job for three years or have held no more than two jobs in the last five years. The banks claim to be the first in the St. Louis area to offer extended terms, and the offer was made only after local auto dealers were contacted to solicit their support. The minimum price of an auto being financed over an extended period is $5,500, according to a Dyna Group spokesman. A spot survey of banks in the MidContinent area shows that a number of banks are offering extended terms. One bank in Kentucky reported that it was forced to offer 48-month financing be cause a nearby bank went to 60-month terms and finance companies were offer ing more liberal terms than the normal 36 months. In order to secure auto financing business, the bank recently conducted a county-wide incentive program for auto dealers, offering a 15-piece crock ery set to every dealer for each auto installment loan contract placed through the bank. The bank shipped the crock ery sets to the dealers for distribution to members of the dealers’ sales forces. Deposit Guaranty National, Jackson, Miss., offered 42-month terms last year in order to help consumers handle the increasing costs of autos. Arkansas Bank, Hot Springs, is offering 42-month terms to help whittle down the size of pay ments because of the higher prices for autos. A bank in Louisiana is seriously con sidering 42-month financing and plans to test-market the concept. However, a 82 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis spokesman expressed reservations about promoting auto loans due to the recent Federal Trade Commission holder-indue-course regulation that removes the protection banks once enjoyed in this area. A spokesman for a bank in New Mexico stated it was forced to go along with a 42-month auto loan policy due to the prohibitive cost of new autos. First Security National, Lexington, Ky., offers 42- and 48-month terms as well as lowered rates and cash-dealer incentives. According to Vince G. Ricci, assistant vice president, the extended terms are offered to combat higher sticker prices. First Mississippi National, Hatties burg, put on a rebate program early last year at about the same time auto manufacturers were offering factory re bates. THE 48-MONTH NEW CAR LOAN It gives you more months to pay So you pay less per month ««MNCiAlC8NTERS Cmshmod Clayton Bank EllisviMe Bank A d fo r D y n a G ro u p B anks, St. Louis, ann ounces 4 8 -m o n th new car lo an s fo r tr ia l p e rio d . According to Paul W. McMullan, chairman, the bank felt the need and responded to the economic conditions that were prevalent by offering an in centive to stimulate auto sales. For one month, the bank gave $100 rebates to anyone financing a new car with the bank. Those customers dealing with the bank directly received their rebates on the spot. Those financing through deal ers on the bank’s dealer finance plan received their rebates in the mail. “We saw no way to lose,” Mr. Mc Mullan said. We sincerely wanted to stimulate auto sales in our markets. The program was no gimmick. We paid for it from our promotions budget and not by raising our finance charge.” The bank s Jackson branch financed 46 new autos during the program, al most double what it had done a month previously. The Hattiesburg and Gulf Coast results reflected increases of 32% and 28%, respectively, Mr. McMullan said. At the end of 1975, First Mississippi National sponsored a Christmas bonus promotion, which was a rebate program tied into the holiday. Dealers partici pated financially in this program by sharing the overall cost, Mr. McMullan said. Customers financing autos were given a choice of one of four nationally known home appliances at no cost. The appliances were a hair dryer, a toasteroven, an electric knife and a coffeemaker. Mr. McMullan said this program was not as effective as the rebate plan but neither was it as expensive for the bank. A total of 280 autos was financed during the two-month promotion. Speaking against the extension of credit terms was a St. Louis banker, who said that his bank will not extend credit terms beyond 36 months because an auto’s life expectancy is no longer than three years. When autos start breaking down, he said, people don’t want to keep making payments on them. The Dyna Bank spokesman said that most auto owners don’t seem to be too concerned with the total cost of an auto, but they want the monthly pay- MID-CONTINENT BANKER for April, 1976 THESE GUYS WON’T LEAVE W ELL ENOUGH Joe Blank, Mike Miller and Ron Deal. It seems they have a couple of key phrases that work consistently well. For us, and our corre spondent banking friends. They go like this: What if? Why don't we? Why not try this? (and) I wonder why nobody else thought of that? We didn’t get to be the largest bank in the state by offering you the same tired solutions over and over again. We keep it loose. Because every bank, and every banking problem, are MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis unique. And were flexible enough to find the best solution for you. Because we’ve got people who won’t leave well enough alone. Call us toll free. In Tennessee, T 8 0 0 -3 4 2 -8 2 4 0 . In other states, T 8 0 0 -2 5 T 8 5 1 4 . VI First A m erican First Am erican Center, Nashville 37237 FirstAmtennBankgroup M em ber FDIC 83 ments to be manageable. In its advertis ing for the 48-month terms, Dyna Bank published figures showing the amount of the monthly payment with four-year terms. A §5,000 loan is repaid in pay ments of $129.16 per month; a $4,000 loan in payments of $103.33 per month; and a $3,500 loan in payments of $90.41 per month. Annual percentage rate is 10.98%, according to the adver tisement. In some areas, auto dealers are against extended terms because they feel people will purchase fewer cars if they have to make extended pay ments. A counter argument to this is the fact that many people today say they plan to keep autos longer than they did formerly, due to the higher prices of new autos. Those in favor of extended terms point out that the terms are good for auto sales, since they en courage people to buy cars who felt they could not afford to under the monthly payments required by 36month rates. * * Exclusively Municipal Bonds Banks Push Auto Loans With Premiums, Incentives Banks not offering extended credit terms for auto loans (see adjoining article) are nevertheless promoting the loans by the use of premiums. National Bank of Commerce, Mem phis, is currently offering free citizen band (C B ) radios to customers taking out auto loans of at least $3,000 over three-year terms. The bank expects to obtain 1,000 new loans. First National, Martinsville and Henry County, Va., offered customers a choice of a tote bag, camera or auto emergency kit when they financed an auto at the bank. Charter banks of Overland and Jen nings, Mo., offer their “PAL” loans ( Charterbanker’s Pre-Approved Loan) that enable customers to secure their loans before purchasing new autos. This enables them to deal on a “cash” basis, the bank’s advertising states. An Indiana bank provided free car washes to auto loan customers, and a bank in Missouri paid for the first year’s maintenance on cars it financed. A bank in Ohio publishes a chart showing typical monthly payments on auto loans, and it has been credited with bringing new business to the bank. Customers actually clip out the charts and bring them to the bank when ap plying for auto loans. A spokesman said the chart enables customers to compare rates with those of other lenders. ABA Publishes Analysis Of EFT Legislation and ALL GENERAL MARKET BONDS Y o u r " C o rres p o n d e n t” f o r M u n ic ip a l B o n d s in v estm en t B a n k ers • M u n ic ip a l B o n d s ONE TWENTY SEVEN WEST TENTH KANSAS CITY, MISSOURI 64105 (816) 221-4311 84 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis WASHINGTON, D. C.—A 40-page analysis of various approaches taken by state legislatures on E F T has been published by the American Bankers Association. Originally published as a chapter in the ABA’s State Banking Law Service, the book is entitled R em ote E lectronic Facilities—An Analysis o f E nabling Acts. The book includes: • Nontechnical descriptions of the contents of statutes, state by state. • An outline of policy considera tions in E F T lawmaking and a review of how states have dealt with such issues as branching, sharing, out-ofstate entry, geographic limitations, scope of regulatory authority in policy making and supervision. • A quick-reference matrix compar ing the provisions of state statutes. • Definitions of federal regulations and rulings. R em ote E lectronic Facilities—An Analysis o f Enabliiig Acts (publication number 029300) is available through the ABA Order Processing Department. MID-CONTINENT BANKER for April. 1976 BANKS COME IN ALL SIZES... ...sin d y o u 'll find detiiiled inform ation ab o u t e v e r y sin gle one in th e A o rtli A m erican and In te rn a tio n a l Editions of P o lk 's W o rld B a n k D ire c to ry POUTS WORLD BANK DtRICTORV I M / P O I J v & C O . p u b lis h e r s Lv P. 0 . B o x 1 3 4 0 , N ashville, T e n n e s s e e 3 7 2 0 2 T e le p h o n e 6 1 5 /8 8 9 - 3 3 5 0 C able A d d ress E N C Y C O B A N K MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Fred N. Coulson, Jr. Joe Williams "You do the im possible ultim ately the difficult, im m ediately.'' Joe Williams was a familiar figure in early Commerce days. Red-haired, nattily dressed, he was one banker who always seemed to remember your name. Joe Williams headed the Commerce Correspondent Department during the turbulent time of the 30’s. He later became president of the bank. Joe believed that Commerce bankers should do the impossible ultimately—the difficult immediately. That included pioneering the nation’s first 24-hour transit department in 1928. A transit department so complete that banks all over the country turned to Commerce for advice. It also included special attention to each and every bank we served. S O UL 1NG C o m m e r c e Ba n k o f K a n s a s C it y 9th & Main 234-2000 86 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There was no end to what Joe believed could and should be done for his customers. Banking is more sophisticated today, but Fred N. Coulson, Jr. head of our Correspondent Department, still believes in complete service for our customers. Fred’s people become totally involved with the banks they serve. They continue to find new, innovative means to help correspondent banks. Maybe that’s why approximately one out of every ten banks in the country maintains a relationship with Commerce Bank of Kansas City. Commerce Bank, what can we do for you? 10th & Walnut 12th & Charlotte M em ber FDIC MID-CONTINENT BANKER for April, 1976 PORTER ROGERS McGEE SLEDGE LA THA M PANEYKO Convention 'First-Timers' These new faces w ill be representing city-corresp o n dent b an ks at state conven tions this y e a r. Texas Convention • George William Porter, a corre spondent banking officer for Commerce Bank, Kansas City, joined the bank in 1973 as a management trainee follow ing graduation from Drake University with an MBA degree. • John Marshall McGee is a corre spondent banking representative at Commerce Bank, Kansas City. He joined Commerce Bancshares in 1974 as a management trainee at Commerce Bank, Columbia, Mo. • Thomas B. Rogers is an assistant vice president at National Bank of De troit, which he joined 10 years ago. He represents the bank in the western U. S. DANFO R TH • S. Bradford Sledge joined Frost Bank, San Antonio, in 1972 and is cur rently an assistant vice president in the correspondent banking department. He is a member of AIB. • Stanley A. Latham is a division loan representative for First National, Chicago, assigned to the western terri tory. • Stephen H. Paneyko is an assisttant vice president in area four at Citi bank, New York City. He joined the bank six years ago, following service with Philadelphia National. • Fred C. Danforth is an account officer at Citibank, New York City. He joined the bank in 1973 and repre sents the bank in Oklahoma, New Mex ico and Texas. • Bradford M. Johnson is an ac count officer at Citibank, New York City. He joined the bank in 1972 and covers Oklahoma, New Mexico and Texas. JO HN SO N MID-CONTINENT BANKER for April, 1 976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis B A L L A N T IN E HAHN AMBI Convention • John W . Ballantine is a loan offi cer for First National, Chicago. He is responsible for handling bank and HC credit in the bank’s six-state central territory. • Robert E. Hahn is a loan officer in the central territory for First National, Chicago. His account responsibility is in Michigan. • Mary Jo Franklin is a loan officer with First National, Chicago, with ac count responsibility in Illinois. Louisiana Convention • Gary E . Metzger joined Mercantile Trust, St. Louis, in 1974 as an analyst in the credit department. He joined the central group of the banking depart ment last May. • John V. Raymond Jr. is a corre spondent bank officer at Bank of New F R A N K L IN M ETZGER 87 Auburn University Educators To Be in Spotlight May 13-14 As Ala. Young Bankers Meet RAYMOND C R A W FO R D Orleans. He joined the bank in 1972 and has been with the correspondent bank department since last October. • Stephen H. Paneyko, assistant vice president, Citibank, New York City, covers the West and Southwest and serves as unit head for Texas. He joined the bank in 1970. • Adona Yelton is an account officer in area four at Citibank, New York City. She joined the bank in 1969 and represents the bank in Alabama, Ar kansas and Louisiana. Photo not avail able. M ONTGO M ERY CURTIS Arkansas Convention • Al Montgomery has been with First National, Memphis, since 1971 and took part in the bank’s manage ment training program. He joined the correspondent department last June. Kansas Convention • Gary W. Curtis is an agriculture representative for American National, St. Joseph, Mo. He joined the bank in 1975 and calls on customers in Kansas and Missouri. • James W. Crawford Jr. joined De posit Guaranty National, Jackson, Miss., in 1971 and is an assistant vice presi dent in the correspondent bank de partment. 1770 Imagination in Correspondent Banking. At Union Bank in Montgomery, Don Lamon and his associates have brought imagination and innovation to Corre spondent Banking, while maintaining the friendly personal service that Union Bank has been noted for since 1901. Alabama's Largest Independent Bank. 88 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis G U LF SHORES, ALA.—The Gulf Shores Lodge will host the annual Ala bama Young Bankers Section meeting May 13-14. Featured speakers will be Joe L. Boyer, Robert C. Maxson and F. Morgan Simpson of Auburn Univer sity, Montgomery. Registration for the event is slated to begin at noon May 12. Topping off that afternoon will be a happy hour. The first general session is scheduled to commence at 9 a.m. Thursday, May 13, with an address by Dr. Boyer, en titled “Inside Today’s Schools.” At 9:45, the action labs will begin. Dr. Boyer will conduct one called “Planning the Instructional Episode,” Dr. Maxson will oversee “Understanding the Instruc tional Setting,” and Dr. Simpson will guide the Young Bankers through “Techniques of Instruction.” Each lab will be repeated from 11noon that day and again on Friday, from 9-10 a.m. Thursday evening there will be a happy hour, followed by dinner. The second general session, Friday, May 14, will begin at 10:15 a.m., fol lowing the action labs. Dr. Simpson, Dr. Maxson and Dr. Boyer will speak on the “Techniques of Instruction.” Dr. Maxson will be the spotlighted speaker during the third general session at 11:30. His topic will be “The Chal lenge.” vv A , £ ; a IV E Y JONES BOYD £ ft 7 \ \ HALEY 1 % 4 5 JSIVD1 — *1976* < r UNIONBaNK & TRUST CO. MEMBERF.D.I.C. 60 COMMERCE STREET MONTGOMERY, ALABAM A 36104 MID-CONTINENT BANKER for April, 1976 Friday evening an awards banquet is scheduled. President of the Young Bankers is William R. Haley Jr., vice president, Alexander City Bank. He began his banking career with Bank of Heflin, where he attained the position of as sistant vice president. From there, Mr. Haley went to Exchange National, Montgomery, where he was vice presi dent and cashier. In 1970, he was voted the state’s outstanding group chairman in the Young Bankers Section. Kay Ivey, assistant cashier-public re lations and advertising, Merchants Na tional, Mobile, is the Young Bankers vice president, the first woman to be elected to that office. She joined her bank in 1970 and was listed in the 1971 Outstanding Young W om en of A m erica, was the first woman to win the AIB’s Mobile Chapter public speak ing contest, 1972, and in 1973 was named as that chapter’s “Woman of the Year.” Eugene Boyd, executive vice presi dent and cashier, Jacksonville State, is the Young Bankers treasurer. He began his banking career in 1958 with Com mercial National, Anniston. In addi tion, he is a director and a course in structor with the AIB. Serving as secretary of the Young Bankers Section is J. R. Jones, vice president, Escambia County Bank, Flomaton. He joined his bank in 1972 as assistant vice president, advancing to vice president in 1974. Mr. Jones cur rently is vice chairman, Ala BA Group Nine. NOW YO U MAY NEVER HAVE TO BUY T-BILLS AGAIN . . . TRUST FOR SHORT-TERM U.S. GOVERNMENT SECURITIES Companion to Money Market Management, Inc. * Invested exclusively in U.S. Government Securities maturing in one year or less. * Provides the yields of various governm ent issues with different maturity dates. * No minimum holding period. * Stability of principal — constant net asset value $1. * Portfolio priced at amortized cost. * Provides first day’s interest; dividends 365 days a year. * Telephone transfer of monies. I * No charges to buy. No charges to sell. M in im u m in v e s tm e n t: $100,000— 90 d a y a c c u m u la tio n p e rio d . All e xpe n se s w a iv e d u n til J u n e 1, 1976. For more com plete inform ation on TRUST FOR SHORT-TERM U S GOVERNMENT SECURITIES management fees and expenses call our Bank Service Desk. Ask fo r our lite rature and prospectus. Be sure to read before you invest. Call toll free: 800-245-2423. FEDERATED SECURITIES CORP. Distributor Dept. ST-4 421 Seventh Avenue, Pittsburgh, PA 15219________ A n American A cco u n t': ABA-Sponsored Movie Traces Banking Evolution As part of its centennial, the Amer ican Bankers Association has produced a half-hour motion picture documen tary, “An American Account: The Story of Banking.” The film, which has been offered to banks prior to general distribution, takes a look at the evolution of bank ing and currency in this country, trac ing the growth of banking in America from colonial days to the present. The ABA is offering the film on a free-loan basis and banks may buy copies for showing in the community or for donation to local schools and libraries. In addition, the movie may be personalized with the bank’s own identification. Included with the film is a support package containing an assortment of materials for generating awareness and discussion. MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In 1849 we opened with a statem ent you could bank on. It’s worth repeating. “It is intended to encourage the industrious and prudent, and to induce those who have not hitherto been such, to lay by something for a period of life when they will be less able to earn a support." and we’ve been taking good care of people’s money ever since. L h V D E T R O IT W A BANK X H f Ej T R U S T Member FDIC — .................... = ........................................................................ ..................... FOR EVERY CORRESPONDENT SERVICE IN CENTRAL ILLINOIS IT’S THE ^ A D / 7 7 S p rin g fie ld OLDEST BANK IN ILLINOIS SPRINGFIELD, ILLINOIS O R G A N I Z E D 1851 member f.d.i.c.- federal reserve system 5 E RV X PHONE (217) 753-6000 90 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 1976 AMBI Convention (Association for Modem Banking in Illinois) Chicago, III., M a y 2 -4 , L in co ln sh ire-M arrio tt FIRST SESSION, 9:15 a.m., M ay 3 Welcome— Lester A. Kassing, president, AMBI, and presi dent, Jefferson Trust, Peoria. Address— "Where Do We Stand':1” Mr. Kassing. Panel— “Our Competition— Our Constraints—What Are They? What Are They Doing Now? What Does the Future Hold?” Panelists: Walter J. Charlton, AMBI executive committee chairman and president, First Trust, Kankakee; Robert P. Abate, president, Elgin National; Arthur "Ron” Swanson, legislative representa tive, Springfield; William D. Plechaty, senior vice presi dent, Continental Illinois National, Chicago; and George Phelan, executive vice president, First National, Boston. Address— “How the Financial Editor Looks at Commercial Banking”—Albert L. Kraus, editor, M oney M anager magazine. Panel— "The Political Action Scene.” Panelists: James Cassin, senior vice president, First National, Chicago; Gerald Sinclair, vice president, AMBI, and executive vice president, Salem National; Jay K. Buck, senior vice president, Northern Trust, Chicago; Robert B. Maher, legislative representative, Springfield; and Mr. Swanson. SECOND SESSION, 2 p.m., M ay 3 Address— “What’s New for Bankers With the Construc tion and Housing Industry”—James S. Dailey, executive vice president, First National, Chicago. Address—"W hat’s New for Bankers With Bank Insurance Programs and Risk Management”— Robert W. Marshman, vice president, Scarborough & Co., Chicago. Address— “What’s New for Bankers With Agriculture”— W. Ross Hostetter, senior vice president, First National, Freeport. Address— “What’s New for Bankers With E F T S Programs” —Phillips M. Montross, executive vice president, Mid west Automated Clearing House Association, Chicago. Address— “What’s New for Bankers With Bank Marketing” — Kent Stickler, vice president, Illinois National, Springfield. THIRD SESSION, 9 a.m., M ay 4 Address— “The Municipal Crisis and Other Current Prob lems in Commercial Banking”—James Baker, senior vice president and economist, Fidelity Bank, Oklahoma City. Panel— “Bank Asset Management—the Challenge Now and in Our Future.” Panelists: Mr. Baker; James E. Gatton, senior vice president, United Bank of Illinois, Rockford; Dean E. Kamper, president, First National, Belleville; Larry L. McGregor, president, Wheaton Na tional; and Richard Thomas, president, First National, Chicago. Report of the Trust Committee— Kenneth Roeh, vice pres ident and trust officer, First National, Rockford. Report of the Education Committee— Loren M. Smith, president, United Bank of Illinois, Rockford. Address— "Objective: a Profitable Trust Department”— Ray Myers, executive vice president, Continental Illinois National, Chicago, and chairman, American Bankers Association Trust Division. Business Meeting. Board Meeting. Adjournment. Bicentennial Is Running Theme of ÀMBI Convention HE TH IRD annual convention of the Association for Modern Banking in Illinois (A M BI) is scheduled for May 2-4 at the Lincolnshire-Marriott in Chicago. The convention’s schedule of activities promises a busy and informa tive time for those in attendance. The running theme for the event is the bicentennial, and scheduled are a number of films, slides and a reception following the theme of the nation’s 200th anniversary. Registration for the AMBI conven tion is slated to begin Sunday, May 2, T in the main lobby area at 2 p.m. At 6:30 p.m., a cocktail-buffet reception with a “make-believe ballroom” theme will me held, wherein films of big bands such as Glenn Miller, Harry James and Tommy Dorsey will appear on a movie screen playing songs of their era. The bicentennial will be the opening feature of the first business session May 3, with a film and slides on the topic. Following that will be a welcome and address by AM BI President Lester A. Kassing, president and CEO, Jefferson MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Trust, Peoria. His speech is entitled “Where Do We Stand?” Dr. Paul Nadler, professor of busi ness administration at Rutgers Univer sity, New Brunswick, N. J., will be the luncheon speaker May 3. He will dis cuss “Banking Constraints, Banking Competition and Financing American Industry.” That evening at 6 p.m., the bicentennial dinner and “ ’76”-theme reception will begin. The dinner is en titled “What They Ate on the Occasion of the Declaration of Independence Banquet,” and is by special invitation 91 of “George and Martha Washington.” Tuesday, May 4, will feature a 12:30 pan. cocktail reception followed by lunch. Luncheon speaker Dr. Maurice Mann, president, Federal Home Loan Bank, San Francisco, will answer the question, “What Does Our Competi tion Think of Us?” A number of social events are slated during the AMBI convention, beginning with a cocktail-buffet reception hosted by the Chicago Loop banks from 6:309 p.m. on Sunday, May 2. AMBI has planned the following events for spouses of members: On Monday morning, a 9:30 continental breakfast will be held, followed by a discussion by the chef of the Marriott Hotel on “How To Make Party Plan ning Easy.” A two-hour shopping tour to Long Grove Village, a turn-of-thecentury town, will begin at 2 p.m. Tuesday, May 4, will be kicked off by a 9-11 a.m. speed-reading course by Joyce Turley, president, Dimentional Reading, Inc., Tiburon, Calif. Officers of AMBI, in addition to Mr. Kassing, are: Alvin J. Boutte, president and CEO, Independence Bank, Chicago —vice president; Gerald Sinclair, exec utive vice president, Salem National— vice president; Walter B. Lohman, president, First National, Springfield— treasurer; Robert C. Humphrey, presi dent, State National, Evanston—secre tary; and Henry E. Seyfarth, chairman, First National, Blue Island— chairman. AMBI executive committee chairman is Walter J. Charlton, president, First Trust, Kankakee. Mr. Kassing entered banking in 1958 with Indiana Bank, Fort Wayne. He joined his present bank, Jefferson Trust, Peoria, as president in 1971. K A S S IN G BOUTTE HUM PHREY C H A R LTO N Mr. Boutte was a founder of Inde pendence Bank, Chicago, in 1964, and served as vice chairman until he was elected president in 1970. AM BI’s other vice president, Gerald Sinclair, present ly is executive vice president, Salem National, and is a past president, TriCounty Bankers Federation. Association Treasurer Walter Loh man began his financial career as an accountant with the U. S. Department of Agriculture in 1939. One year later, he joined Pleasant Plains State, which he left in 1942, going to State Bank, Ashland. He was named president of that bank in 1957. He joined First Na tional, Springfield, in 1962. In 1966 he was named executive vice president and AMBI Goals Are Our Goals . . . We salute the job AMBI has done since its inception in 1973. It has made great strides. May th is th ird annual convention bring the goals closer to attainm ent. a t i o n a l B a n w C o llin sville and M issouri Aves. • 271-1000 in iiv lr e 7 5 E s ta b lis h e d 1901 92 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SEYFARTH was elected president one year later. Robert C. Humphrey, AM BI’s secre tary, is president, State National, Evans ton, and serves in a number of capaci ties with a variety of other organiza tions. Mr. Seyfarth is a member of the Chicago law firm of Seyfarth, Shaw, Fairweather & Geraldson, which he joined in 1945, following seven years with another Chicago law firm. He is a member of the Chicago, Illinois and Federal Bar associations and is chair man of Union National, Chicago, and First National, Blue Island. He is one of the organizers of AMBI. Mr. Charlton entered banking with First Bank Stock Corp., Minneapolis, and joined First Trust, Kankakee, in 1950. He was elected a director there in 1953 and executive vice president in 1962. He was elevated to president in 1965. Mr. Charlton also is chairman, First Bank, Meadowview, is an AMBI organizer and served as its president, 1973-75. * • More Can Vote in '76 After Registration Drive OF EAST ST LOUIS M EM BER FEDERAL D EPOSIT IN SU R AN C E CORP. LO HM AN Thanks fo Bank: U n io n n S IN C L A IR TV The Denver voter registration roles have been increased by 203, following a mobile registration program sponsored by First National in conjunction with the City Election Commission. The registration was held in a mobile “booth,” a special bus provided by the Regional Transportation District. The vehicle had been decorated for the na tion’s 200th anniversary with a starspangled border and a minuteman carrying a red, white and blue banner. MID-CONTINENT BANKER for April, 1976 of people joined a waiting list for a second shipment of the items. In Chicago: The Money Store Opens; Makes Low-Interest Loans Harriscorp Finance, Inc., a wholly owned subsidiary of Harris Bankcorp., Inc., Chicago, has opened The Money Store, a low-interest-rate personal-loan facility. Located on the top floor of the sevenstory atrium of the Water Tower Place shopping complex on Chicago’s Near North Side, The Money Store is the first to be opened by Harriscorp F i nance. The store will feature simpleinterest loans. At a Money Store, a customer may establish a revolving credit line and write an unsecured loan with drafts that can be used like checks. No cost is incurred by the customer until the draft is written or when cash is drawn — via the Money Store card—from the Money Store Machine. The machine at the new location operates until mid night seven days a week. In addition, The Money Store makes loans to approved customers of up to $15,000 on a regular installment basis. The 'C lin cher': Continental Bank Depositors Can Get Polaroid Cameras G. W a r d Stearns, p res., B ank o f N a p e r v ille , III., presents lim ite d -e d itio n c o m m e m o ra tiv e p la te to Ja n e S indt, p re s id e n t, N a p e r v ille H e rita g e Society. Iro n s to n e p la te s w e r e o ffe re d as " g o o d w il l" p re m iu m to th o s e d e p o s itin g $200 in bank and b o re likeness of M a r tin - M itc h e ll M u s e u m , lo cal la n d m a r k . began offering the plates, which bore a picture of a local landmark. Those depositing $200 received a plate. Statement stuffers were sent to all checking and savings depositors; ads were run in the local weekly news paper and point-of-purchase displays were set up in the bank lobby. How popular was the promotion? Bank officials state that quite a number Customers depositing $300 or more at Continental Illinois National, Chi cago, have the opportunity to purchase a Polaroid “Clincher” camera at belowretail cost. Price of the camera, which takes both color and black-and-white photo graphs, is $10.45, tax included. While the “Clincher” isn’t available at retail stores, it is comparable to Polaroid’s “Square Shooter,” a $25 camera. In the promotion, Continental de positors receive a certificate, which can be used to redeem the camera. Those making deposits by automated teller machine are mailed a certificate and may obtain the “Clincher” by mail or in person. To get the promotion off to a start, the bank had representatives from Polaroid in the lobby during the noon hour the first week, taking photos of interested customers with the cameras. SINCE 1836 S ta n le y G. H a rris Jr. (I.), v. ch., H a rris B a n k co rp ., In c ., C h ic a g o , d e m o n s tra te s c a s h -lo a n d isp en s in g m a c h in e to Joseph A B u rn h a m , pres., M a r s h a ll Field & C o ., C h ic a g o . M a c h in e is lo c a te d a t M o n e y S to re, p e rs o n a l lo a n office a t W a te r T o w e r P lace, C h ic a g o . Store is o p e r a te d by H a rris c o rp F in an ce , Inc., s u b s id ia ry of fir/t national bank & tru /t com pany HC. Thank You': Bank Holds Plate Offer; Builds Customer Good W ill Looking for a good way to say “thank you” to your bank’s customers and build good will? Bank of Naperville, 111., used a commemorative plate offer to do just that. No preliminary research was under taken prior to the promotion’s intro duction, but sketches of historic sites had been well received by the commu nity in prior years. Having the objec tive of good public relations rather than building deposits, Bank of Naperville MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TWO LOCATIONS TO SERVE YOU! Third and Belle Streets (Complete Banking Service) Sixth and Belle Streets (Drive-In, Walk-Up Only) ALTON, ILLINOIS Member FDIC 93 Whatever your management problem, chances are that we have solved it be fore in our more than ninety years of banking experience. Or, that we know someone who has. Helping correspon dent banks to grow has been what banking has been all about at the Whit ney for almost a century. We’re ready to lend our men and our resources to making correspondent banking better 94 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis for you, better for us. Ask your man from the Whitney today! MID-CONTINENT BANKER for April, 1976 Louisiana Convention President N ew O rle a n s , M a y 1-3 Headquarters—FAIRMONT HOTEL PROGRAM A C K L IN J. D. A c k lin J r., LBA p res., is ch. & p res., P la n te rs B a n k , H a y n e s v ille , w h ic h he jo in ed in 1 9 4 7 , a d v a n c in g to his p re s e n t p os itio n in 1 9 7 2 . M r. A c k lin is a fo r m e r tre a s . o f th e LBA J u n io r B a nkers Section. ONE SESSION ONLY, 9:30 a.m., M ay 3 Call to Order—J. D. ACKLIN JR., president, Louisiana Bankers As sociation, and chairman and president, Planters Bank, Haynesville. Invocation— DONALD D ELCAM BRE, president-elect, Louisiana Bankers Association, and president, State National, New Iberia. President’s Message—J. D. ACKLIN JR. Treasurer’s Report—J. B. FALGOUST, treasurer, Louisiana Bankers Association, and executive vice persident and cashier, Bank of Va cherie. President-Elect Election of American Bankers Association Councilman—PAT W IL LIS, American Bankers Association vice president for Louisiana, and vice president, Fidelity Bank, Baton Rouge. Address—W. LIDDON M ePETERS, American Bankers Association president-elect, and president, Security Bank, Corinth, Miss. Report of Board and Executive Vice President— R O BERT I. D ID IE R JR., executive vice president, Louisiana Bankers Association, Baton Rouge. DELCAM BRE Resolutions— PAT W IL L IS, chairman, Rules and Calendar Commit tee, Louisiana Bankers Association. LBA p re s .-e le c t is D o n a ld D e lc a m b re , pres., S ta te N a t'l, N e w Ib e r ia . In fin a n c e m ost o f his life , M r. D e lc a m b re jo in ed S ta te N a t'l in 1 9 5 5 a n d w a s n a m e d pres. 12 y e a rs a g o . Committee Reports. Reports From Groups. H e served th r e e y e a rs on th e Fed's N e w O rle a n s B ranch b o a rd . Treasurer C on ven tio n Sp e ak e rs FA LG O US T J. B. F a lg o u s t, e .v .p . & cash., B a n k o f V a c h e rie , is th e LBA tre a s . H e jo in ed his b a n k in 1 9 5 1 , a tta in in g th e CEO 's post in 1 9 7 1 . M r. F a lg o u s t is a f o r m e r LBA d ir. MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MePETERS W ILLIS D ID IE R 95 Spirit of 76' Is Theme During LBA Convention NEW ORLEANS—The “Spirit of 76“ will prevail during the annual con vention of the Louisiana Bankers As sociation May 1-3 at the Fairmont Hotel. Its first official function will be a two-hour informal reception having a 7 6 theme, at Gallier Hall at 5 p.m. A novelty band will be on hand for enter tainment. While the LBA convention is slated to open officially at noon May 1, reg istration will begin in the Fairmont’s Grand Ballroom at 9 a.m. and continue until 5 that afternoon. Registration will continue on Sunday, May 2, in the same time period and in the same place. Ex hibits also will be open for inspection from 9 to 5 Saturday and Sunday in the Grand Ballroom. At noon Sunday, the women’s con vention committee meeting will com mence in the Orleans Room. The past presidents’ luncheon is slated to begin 45 minutes later in the Gold Room. All LBA officers, members of the LBA board and LBA past presidents are in vited to attend. The Rex Room will be the site of the first-ladies’ luncheon at 12:45. It is for wives of the aforemen tioned. Monday’s events will be kicked oil by the opening of registration at 8 a.m. in the Grand Ballroom. At the same time, the breakfast for graduates and students of the School of Banking of the South will begin in the University Room. At 9 a.m., the Imperial Ballroom will be the site of the women’s bingo party, followed at noon by a social and luncheon. Bingo prizes will be donated through the courtesy of LBA member banks. In addition, the exhibits also will open at 9 a.m. At 9:30 a.m., May 3, the conven tion’s only business session will com mence in the International Ballroom. It will feature presentations by LBA president J. D. Acklin Jr., chairman and president, Planters Bank, Haynesville, and by W. Liddon McPeters, American Bankers Association president-elect, and president, Security Bank, Corinth, Miss. Also on the agenda for the busi ness session is the reading of commit tee reports and resolutions. Following the business session will be a 12:30 men’s social and luncheon in the International Ballroom, during which nomination and election of new officers will be held and awards will be presented to outgoing board members. At 6:15 the evening of May 3, a social will begin in the International Ballroom, followed at 7:30 by the an nual banquet and dance in the Im perial Ballroom. During the dinner, 50Year honorees will be recognized, new officers and board members will be in augurated and the outgoing president and his wife will be honored. Dancing is scheduled until midnight to the bigband sound of Pat Barberot and his or chestra. Serving as general convention chair man for this year’s LBA convention is James Alario, executive vice president and cashier, State Bank, Golden Mead ow. Claire Acklin of Haynesville chairs the Ladies Committee, while Pat W il lis, vice president, Fidelity National, Baton Rouge, serves as chairman of the Rules and Calendar Committee. For "Person to Person Service" call ■ PH ILIP E. DOOLEN has been named vice president, Whitney Na tional, New Orleans, while Gerald J. Catoire has been elected auditor. Rob ert J. Friedrich Jr. and Edison J. Schayot Jr. have been elevated to as sistant cashiers, and John C. Carriere has been promoted to assistant trust officer. Mr. Doolen has been with the bank since 1954; Mr. Catoire, since 1963; Messrs. Friedrich and Carriere, since 1972; and Mr. Schayot, since 1969. D O O LE N BASCOM ■ GLEN E. BASCOM has been ap pointed vice president and manager of the newly created government securities department at Howard, Weil, Labouis se, Friedrichs, Inc., New Orleans. For the last two years, Mr. Bascom has been vice president and manager, in vestment division, Hibernia National, New Orleans. Prior to that, he was vice president, investments, Flagship Bank, Tampa, Fla. ■ M ICHAEL J. RAPIER has been elected president and chief adminis trative officer, National Bank of Com merce, Jefferson Parish. He formerly was executive vice president and has been in banking over 15 years. Howard, Weil Nasdaq symbol: HWLF Specializing in Louisiana and Mississippi Municipal Bonds CORPORATE SECURITIES NEW ORLEANS BANK STO CKS SOUTHERN & GENERAL M AR KET MUNICIPALS TEL. 2 1 2 -4 -2 2 -3 3 0 0 N E W Y O R K O F F IC E M e m b e rs : N e w Y o rk S to c k E x c h a n g e . In c .. A m e r ic a n S to c k E x c h a n g e C h ic a g o B o a r d o f T ra d e . C h ic a g o M e r c a n tile C h ic a g o B o a r d O p tio n s E x c h a n g e E xchange In 2 1 Howard, Weil, Labouisse, Friedrichs li a IN C O R PO RA TED çzr*nvedtm ent 1u P I, F tB Ç <~>ecut itieS 211 C a r o n d e le t S t. • T e l. 5 0 4 - 5 8 8 - 2 7 1 1 N e w O rle a n s , La. 96 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in 1 âf Hattier, Sanford & Reynoir IN V E S T M E N T BANKERS Whitney Building, New Orleans, La. 70130 (504) 525-4171 . 1 MID-CONTINENT BANKER for April, 1976 Bossier Bank Plays Key Role in Construction of Area Wire-and-Cable Plant T HANKS TO Bossier Bank, Bossier City, La., which assisted in place ment of $4.3 million in bonds, the Louisiana Wire & Cable Co. is building a new plant in the area. The plant, which will employ about 125 workers initially, will have an an nual payroll of $1.25 million and is ex pected to be completed sometime in late summer. The plant will have 72,000 square feet of space and will be located in the Bossier City-owned industrial park. Louisiana Wire & Cable is a sub sidiary of AG-MET, Hazleton, Pa. The plant will manufacture copper-clad aluminum wire and will recycle copper, aluminum and plastics in the process. On at least two occasions, negotia tions with AG-M ET nearly fell through. However, final placement of the bonds resulted from persistent efforts by the EFTS (Continued from p ag e 30) fore Congress and the Comptroller. W e’ve talked to the Fed and the FH LB, explaining banker positions. W e’ve also communicated banking’s views to the Justice Department. The important point is that with bankers’ help, we’re communicating with government. But their help is essential. A letter from a constituent to a congressman or a letter to a regulatory agency has a great im pact. The staff in Washington can’t do the job alone. What else has the ABA been doing? We contracted with Arthur D. Little Co. for a multi-state pilot E F T S strat egy study. This study was conducted in cooperation with 12 state bankers as sociations. We participated actively in seminars on the social securitv direct-deposit program and sponsored our own semi nars on the same subject. The ABA is sued several publications on the sub ject, including a mini-folder suitable for use as a statement stuffer or as a hand out on a bank counter. Moreover, the association has con ducted two Payment System Policy conferences in the last 14 months, and we’ve supplied staff support for the National Automated Clearing House Association (NACHA). NACHA’s board has approved file specifications for the interregional ex change of ACH entries. This is a sig Preparing to break ground for new Louisiana W ire & Cable Co. plan t in Bossier City, La., are (from I.) U. S. Rep. Joe D. W aggonner Jr. (D.,La.); G erald Cohn, ch., AG-MET, H azleton, Pa., parent com pany of Louisiana W ire & Cable; State Gov. Edwin Edwards; Roy Gold, pres., Louisiana W ire & Cable; Jean A. Q u artemont, pres., Bossier Bank; and James Cathey, Bossier City m ayor. Construction of plan t was m ade possible through bank's successful e f forts a t placing $4.3 m illion in bonds. Plant initially w ill em ploy 125, w ill provide $1.25 million annual payroll. nificant step toward development of a national ACH network. The ABA has established a highlevel Standards Policy Board that will monitor the progress of ABA positions through the American National Stan dards Institution (ANSI) and the Inter national Standards Organization ( IS O ). I guess the best way to describe the ABA’s efforts is to say that we’re acting as a clearing house for information about E F T and we’re identifying areas of concern for bankers. We want to focus attention on the future, so that the banking industry will be ready to meet the challenges of tomorrow. Electronic transfers are here to stay. But each of us will have to determine which E F T services make sense for our banks. W e’ll also have to be aware of the advances being made by our com petitors, and we’ll have to recognize that our competitors aren’t just other banks. Our competition can come from many directions, including from thrifts and the retail sector. I ’m reminded of the F. Scott Fitz MID-CONTINENT BA N KER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ST. M A R Y bank’s bond department, headed by Dale Anderson, President Jean A. Quartemont and officials of Bossier City and of AG-MET. The talks were touched off when the bank’s bond department was contacted by Drexel-Burnham & Co., New York City, the firm underwriting the issue. That company had indicated that an industry was seeking a plant site in north Louisiana. After a number of talks between bank and AG-MET officials, it was felt the plant would provide a valuable and much-needed economic boost to the area. Finally, Bossier Bank was able to place the bond issue with local and regional financial institutions. * * gerald story about New Yorkers and the just-completed Empire State Build ing. From the top of the skyscraper, New Yorkers gained a new perspective on the land— and it frightened them. They realized, for the first time, that there was a whole other world beyond their city. They began to get concerned and upset. Now, we bankers must rise above the everyday E F T events to see the overall trends. Then, rather than become de fensive and isolationistic, we must plan for the world of tomorrow. We cannot deny the future. We can not deny the world of electronic trans fers. But we can help to shape it so that it serves the needs of individual consumers, the public in general, our communities and the nation. Moreover, this wise planning is in the interest of our banks. We have a challenge, and we will respond to it. W e will grow with the times and we will thrive, for we are America’s bankers. * * BANK & TRUST C O . FRANKLIN, LA. S p e c ia l A tte n tio n to C o lle c tio n a n d C a s h Ite m s ! TOTAL RESOURCES $22 M IL L IO N i 1 W. McKERALL O'NIELL, Pres. ■ DON T. CAFFERY, V.P. 1 EDMUND A. NAQUIN, 1 Vice President & Cashier i Member F.D.I.C. 97 Manufacturing in Louisiana Tops $1.5-Billion Mark G eneral Motors Corp.'s Guide Division was one of labor-intensive industries th a t located in Louisiana last y ear. Purpose of Guide D ivi sion is to " w rin g " w e ig h t out of GM cars to im prove fuel economy. Laboratory technician holds reinforced plastic housing used to sup port rectangular headlam ps in some GM cars. Guide plastic housing weighs 6 0 % less than conventional m etal housing pictured a t right. To Make 1975 Banner Year By STANLEY PASSMAN Executive Director Louisiana Department Of Commerce & Industry Baton Rouge m Louisiana during 1975 topped the $1.5 billion-mark, the best year the state has ever had in overall industrial develop ment. Increased industrial growth in the state was reflected in the location of 54 new manufacturing plants and 319 expansions to existing facilities. These plants and expansions contributed $651 million and $849 million, respectively, to 1975’s industrial investment. Also during 1975, there were some 8,100 permanent jobs and 21,357 con struction jobs generated by industrial investment in the state. Investment by industrial category showed petrochemicals and refining with $1,111,443,002; food products, $20,469,552; pulp and paper, $162,191,502; lumber and wood products, $19,050,978; metals and machinery, $54,626,059; stone, clay and glass, $8,807,680; power generation, $58,341,000, and miscellaneous products, $65,528,840. During 1976 it is anticipated that Louisiana’s economy will continue its upward growth at an even more dra matic pace than in 1975. The Louisiana Department of Commerce & Industry has already been informed of planned industrial projects for 1976 that will approach $2 billion of investment in the next 12 to 18 months. In addition, massive construction projects involving nuclear generating stations and the Louisiana Offshore Oil M a n u f a c t u r in g M icrow ave ovens are popular items these days, and many of them are m anufactured in Shreveport, w here Frymaster Corp. has plant. Location o f this factory in Louisiana is just one reason for state's topping $ 1 .5-billion m ark in m anufacturing in 1975 and m aking it best year it ever had in overall industrial developm ent. 98 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Port are only awaiting final federal approval to begin. Together, these proj ects involve additional investments of $1.5 to $2 billion. And they will pro vide the foundation for considerable industrial growth in industries that rely on oil and electrical energy. The Department of Commerce & In dustry is in the process of implementing a new four-point program for econom ic development in Louisiana. As con ceived, the program will offer the greatest number of economic oppor tunities for Louisiana’s residents with maximum utilization of the state’s nat ural resources. The program’s four points are: at traction of labor-intensive manufactur ing industry; achievement of geograph ic dispersion of manufacturing facilities to allow every Louisiana resident to share in industrial development in pro portion to his or her ability; attraction of industiy that will use and process Louisiana’s raw materials and natural resources and development of the ser vice and support industries required by manufacturers located in Louisiana. Louisiana is trying to enlarge the scope of labor-intensive industry and achieve geographic dispersion of manu facturing facilities to give more of the state’s smaller communities a share of Louisiana’s industries. Investment in north and central Louisiana has gone principally into labor-intensive indus tries; whereas south Louisiana, because of the area’s wealth of oil and natural MID-CONTINENT BA N KER for April. 1 9 7 6 gas, has gone into capital-intensive industries. In 1975, Louisiana saw an upswing in labor-intensive industries locating within the state. Representative of in vestment in this category were Calumet Shipbuilding, Martin Mills, Libbey Glass and General Motors’ Guide Divi sion. Together, these four plants gen erated 2,089 permanent jobs with a combined investment of $40,550,345. On the capital-intensive side were ECO L, Ltd., with an investment of $241,230,000 and C F Industries, with an investment of $198,340,000. Both companies fell into the traditionally more capital-intensive petrochemical/ chemical category, which earmarks be tween $250,000 and $500,000 of in vestment per worker. One of the most encouraging signs for Louisiana is the fact that nationwide excess industrial capacity is being re duced rapidly. This means that com panies shortly will have to begin build ing new plants to meet consumer de mands. W e believe we are in an excel lent position to capture a share of this growth, much of which will be laborintensive in nature. We have the available labor and other attractive incentives to offer in dustry in our tax exmption, training and bond programs, and we plan to promote these programs vigorously. Surveying this background of favor able signals, we are very optimistic about 1976. W e think we are in for a good year. * * ■ AMERICAN BANK, Baton Rouge, has named A. Bridger Eglin and Mart Melton Jr. senior vice presidents. Named vice presidents were Melvin J. Marque Jr., Richard E. Orgeron, David Ourso and Dale Dupuy. C. A. Altazan, Lloyd Giblin, Tommy Clark, Charles Earnest, Mae Johnson, Tommy Legleu, Len Marcotte, Johnny Milazzo and Russell Marino have been advanced to assistant vice presidents, while Beverly Waldrop has been named manager, LSU Branch. At the bank’s parent HC, Great American Corp., Baton Rouge, Dennis Lane has been elected vice president and comptroller, while James H. Swann has been advanced to as sistant vice president and director of planning. ■ HENRY G. McCALL II has been appointed vice president, First National Bank of Commerce, New Orleans. Sev eral other promotions have been an nounced at the bank: Holbert D. Blair, to branch manager; Lonnie Baham, ALTICK GUTHRIE ■ CENTRAL BANK, Monroe, has elected James A. Altick president to succeed J. Grayson Guthrie, who now is vice chairman. Mr. Guthrie remains actively involved in a management capacity. Mr. Altick is a director of the bank and had been executive vice president since 1974. Mr. Guthrie is a past president, Louisiana Bankers As sociation and Northeast Louisiana Clearing House Association. George M. Snellings Jr. is chairman of Central Bank. Lionel F. Baxter Jr., Richard J. Chauvin, John A. Fields, Pierce W. Hance and Edwin F. Martin, to assist ant vice presidents; and Melissa W. Averett and L. J. Provenzano, to bank ing officers. City National Bank can supply you with practical ly anything you’ll need to know about Baton Rouge, from road maps to a com plete financial picture of the entire Trade Area. Once you’ve got the City on your side you can take advantage of a lot of hard thinking from our people, and a lot of hard work from our data processing center. We think both are the best in the business. So before you call on Baton Rouge, call on the City first. We know our way around town. C ity National Bank With you for all we’re worth. P.O. Drawer 1231 Phone (504) 387-2151 TWX 510-993-3517 Baton Rouge, La. 70821 Member FDIC MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 99 For three years running the number one agricultural lending bank in Texas. When you want to know about the Panhandle, ask the leader. We can help. G ene Edw ards Chairm an o f the Board and President P eter A Dallas S enior V ice President Ted D avis Executive Vice President D on F. D u ffie ld Senior V ice President Bob J. M c M u r r y Executive Vice President A dm inistratio n Jam e s K. Cox Senior V ice President & C ontroller K e nne th N. Sloan Executive V ice President & Trust O fficer Bill S e w e ll S enior R ob e rt E. Rook Vice President S enior V ice President Correspondent Banking J a c k E. L ittle Senior V ice President Et Tru st O fficer 'You're First with Us!” The FIR ST n a tio n a l B a n k o T R m a r illo P. 0. Box 1331, Amarillo, Texas 79180 (806) 376-5181 100 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BANKER for April, 1 9 7 6 At the District Seven Meeting— Dangers of Big Government Cited bySecretary Simon By LAWRENCE W, COLBERT, Assistant to the Publisher T HE SE R IE S of eight district meet ings of the Texas Bankers Associa tion got underway February 15-16 with the traditional big crowd of al most 1,800 in Fort Worth for the Dis trict Seven meeting. J. B. Wheeler, TBA president and president, Hale County State, Plainview, spoke at the District Seven meet ing outlining the “Texas position” with regard to the Financial Institutions Act. Earlier this year TBA officials had ar ranged a meeting of the 50 state banker association managers in Chicago to poll feelings regarding the ABA position on the Financial Institutions Act. TBA officials felt that the ABA had not taken a strong enough position op posing the legislation. A majority of the state association officials present at the meeting agreed with what has come to be known as the stronger “Texas po sition” and those feelings were con veyed to the ABA governing council. Mr. Wheeler stated it was important to “throw a solid front.” Sam O. Kimberlin Jr., TBA executive vice president, reported on the new as sociation headquarters building progress and the Fine Study. The principal address was delivered by William E. Simon, Secretary of the Treasury. Mr. Simon said, in part: “There comes a point where healthy questioning ends and a kind of poison ous cynicism begins; when people be gin to think that the cause of all their problems is someone else’s fault—pref erably someone high in government, business or finance. “In a negative kind of way, it is very comforting to be able to blame infla tion, recession, productivity problems and the high cost of government on Wall Street wolves and local robber barons. It’s a cop-out, of course—but a particularly tempting cop-ont for pol iticians who have spent the country into unbelievable debt and unaccept able inflation. “So, from a purely public relations point of view, it is not a very good time to be a banker—as you can appreciate far better than I. “And the sad thing about this lies in one of the biggest economic ironies of our time. In recent weeks we have seen a wave of sensational news stories, in print and on the air, questioning the soundness of the American banking system. The impression that one got from these stories was that the whole structure is tottering on the brink of collapse, with some of the biggest names in banking ripe for the endan gered species list. “Now you and I know that this is not the real picture. It is our job to know the facts, and the facts are that the American banking community has emerged from the recession in remark ably good shape. The surprise is not that a few banks— an infinitesimal frac tion of the banking community—have experienced some difficulties. The real surprise, and it’s a pleasant surprise for a change, is that American banks have weathered the storm of the worst recession in a generation, have covered problem loans out of operating funds and have still showed a substantial in crease in earnings. “I submit to you that this is a record to be proud of. But I also submit to you that this is an untold success story— a success story that most Americans have never heard and therefore do not ap preciate. “Which brings me to us—you as bankers and me as Secretary of the Treasury. Perhaps a large part of the blame for the public’s misconceptions about the economic situation lies with us. “If ice can’t get the story across for ourselves, how can we expect anyone else to do it for us? “The banking community, like the rest of the business community, has performed its internal functions ad mirably. But the whole private sector— the source of the enormous abundance, opportunity and freedom that makes our country so unique in the world— has failed at one crucial test. It is not making itself understood to the media, the politicians and, most importantly, to the people. “The free enterprise system has done a magnificant job for everyone but it self. And as a result, it faces an ever growing menace in the form of dimin ishing public confidence and increasing domination by the federal government. “Consider the energy field. In spite of the impact of the oil embargo and MID-CONTINENT BA N K ER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TBA President J. B. W heeler is flanked by Dis trict Ch. Bruce B. C am pbell Jr. (I.) and TBA Vice President S. R. G reenw ood. M r. Cam pbell is ch., Citizens State, Knox City, and Mr. Greenwood is president, Temple N a t'l. the general increase in the cost of im ported fuel, Americans still pay less to heat their homes, run their automobiles and keep the giant wheels of industry turning than any other major industrial power. “The purpose of government energy policy should be to keep those costs as low as possible by encouraging, not dis couraging, domestic energy production without creating a massive, permanent federal energy bureaucracy. “Unfortunately, that is not what is happening. I know. I was there at the creation of the Federal Energy Adminis tration. And if ever there was a clear illustration of the federal foot in the door, it is the evolution of the FEA. Originally, the FEA was intended to be a temporary, emergency measure. Neither I nor anyone else wanted to become a federal energy czar. But that is exactly what happened, not because I or my successors wanted it that way, but be cause bureaucrats and bureaucracies have a way of taking on a life of their own. Dike too many politicians, their first instinct is for personal survival, whether that survival is in the public interest or not. “So, today, we have not only an energy czar, but a federal energy em- 101 For taster service on BANK CREDIT INSURANCE CALL THESE SPECIALISTS Harold E. Ball • Carl W. Buttenschon Leon Robinson • Milton G. Scarbrough 214/748-9261 (§ ) INDUSTRIAL L IF EIN S U R A N C EC O M P A N Y 2808 Fairmount — Dallas, Texas 75201 Amember companyof Republic Financial Services. Inc AMERICAN BANK OF COMMERCE Established 1964 MEMBER INDEPENDENT BANKERS ASSOCIATION OF TEXAS FRANKLIN AT STANTON EL PASO, TEXAS MEMBER FDIC 1-915-544-1420 102 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ill ■ pire to go with him, and a constant clamor on the political front for more and more federal regulation and con trol of petroleum and related energy industries. “Given the poor public image of the oil industry, these demands are increas ingly taking the form of cries for di vestiture, a move that could potentially cripple rather than enhance America’s energy potential. “Attacking the oil corporations makes big headlines and short-term political hay, but those who advocate divestiture have a responsibility to show us how— if at all— their proposals would help us solve our energy problems. And so far, underneath all of the anti-business rhetoric, there has been precious little substance. Advocates of divestiture have found an entire industry guilty without benefit of trial, and they want the public to blindly agree to their kangaroo verdict. “I say they are wrong. To blindly argue for the dismantling of an entire industry without considering the conse quences makes about as much sense as arguing that you can get better mileage out of a car by chopping it up into tiny pieces. In fact, you may get no mileage at all. You may destroy the delicate, in tricate mechanism beyond repair. At the very least, you will have to spend a great deal of time, energy and money in repairing the damage you have done before you can get it back into work ing order. “I am proud of the responsible role which the Administration I serve has played in the field of energy. The orig inal legislation proposed by President Ford was sound and responsible; the changes that occurred were the inevi table result of the legislative process. Neither I nor the President are happy about some of those changes but the political climate in the land—and the communications failure of the private sector—made those changes inevitable. “The Administration’s commitment has been, and continues to be, toward less, not more federal intervention. But we can’t fight this battle alone. It is going to take a massive swing in pub lic opinion, and that, in turn, means a massive effort to educate the public. “As Abraham Lincoln once said, T have faith in the people . . . the danger is in their being misled. L et them know the truth and the country is safe.’ “Already, in at least a broad sense, there are signs of a public awakening to the evils of big government. “More and more people are fed up with a federal government that costs a billion dollars a day and goes another billion dollars into debt every week. “They are sick and tired of a red ink federal track record that has yielded 16 deficit budgets in the last 17 years; that has seen the federal budget quadruple in the past 15 years, and has seen the national debt doubled in a decade. And they are fed up with the growing en croachments of the federal bureaucracy into their everyday lives. They resent the fact that today federal bureaucrats whom they would not have voted for, did not hire and cannot fire have the power to control everything from where their children go to school to how their local communities spend their revenues. Yet unless this general public dissatis faction can be channeled, informed and articulated, the federal juggernaut will keep on rolling and growing by the weight of its own momentum. “The federal government today is the nation’s biggest single employer, its biggest consumer and its biggest borrower. If present trends continue until the end of this century, government at all levels could account for almost 60% of our gross national product—60 cents out of every dollar. If that day ever comes, we will no longer be a free country in any meaningful sense of the word. And to stop that day from com ing, we must act now. “Nineteen seventy six is our bicen tennial year. Across the country mil lions of Americans are celebrating the 200th anniversary of a struggle that was fought and won for the freedom of the individual. But, like all great and worthwhile undertakings, that struggle still goes on. The men and women of ’76 and the millions of immigrants who followed them came to these shores to escap e the kind of government that over-taxed, over-regulated and, ulti mately, stripped the individual of his political as well as his economic free doms. “Today, 200 years later, the ques tion remains: Do we preserve the sa cred heritage of government of the peo ple by the people for the people or do we trade our heritage of freedom for the false security of a state-run economy ‘of the bureaucrats, by the bureaucrats, for the bureaucrats?’ “As a citizen, as a father and as one who has seen the intimate workings of government firsthand, I deeply believe that the central, underlying issue of our time is this basic confrontation between the freedoms we cherish as Americans and their erosion by runaway big gov ernment. “Our cause is just and our cause is strong. It is up to us to get it across to the American people.” • * MID-CONTINENT BANKER fo r April, 1 9 7 6 Ways and means. That's what correspondent banking is all about. When you need either or both, you need to know the people at Frost. Our correspondent bankers—Leonard Magruder, Perry Finger, Brad Sledge and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Steve Aycock—have proven ways to help you with fast and efficient item processing, data processing, BankAmericard®, trust services, and more. Being the largest bank in South Texas, we have the means to assist you wTith over line participations and other credits. So, when you need experienced correspondent assistance, let us be your ways and means committee. Call (512) 220-4114, and ask for us by name. Texas Convention President El Paso, M a y 2-4 Headquarters—Ei Paso Convention Center TENTATIVE PROGRAM SUNDAY, MAY 2 10-11 a.m.—Committee Meetings. 10 a.m.-6 p.m.— Registration and Exhibits. 6-8 p.m.—Opening Night Reception and Ruffet. WHEELER J. B. W heeler, TBA pres., joined Hale County State, P lainview , in 1946, advancing to pres, in 1966. He is a past pres., South Plains Bankers Assn., and w as 1970-71 TBA treas. Vice President MONDAY, MAY 3 9:3 0 a.m.— Opening business Session presided over by J. R. W H E E L ER, president, Texas Bankers Association, and president, Hale County State, Plainview. 10 a.m.—Address: “The Four ‘H’ Club— Could Bankers Qualify?”— DR. N. C. HIGH TOW ER, gastroenterologist, Scott & White Clinic and Hospital, Temple. 11 a.m.— National Bank Division Meeting, with legislative report by LEONARD PASSMORE, TBA Counsel. 11 a.m.— State Bank Division Meeting with legislative report by SAM O. KIM BERLIN JR., TBA executive vice president. 12:30 p.m.—Reception-Luncheon with guest speaker ART LINKLETTER. 6-8:30 p.m.— Reception and Banquet. 8:3 0 p.m.—Entertainment bv TAMMY W YN ETTE and JOHNNY RODRIGUEZ. TUESDAY, MAY 4 GREENWOOD S. R. G reenw ood, TBA v.p., is pres.. Temple N a t'l, and pres., Investors Diversified Developm ent Corp., Inc. He is im m ediate past ch., Governor's State Com mittee on A ging, and chairs the TBA's new -facilities, budget and state-convention-planning committees. 9:3 0 a.m.— Business Session. 10 a.m.—Address: State Governor DOLPH BRISCOE. 10:30 a.m.—Panel discussions on “Bank-Consumer Relationship” and “The Anticipation of Customer Needs in the Future.” 11:30 a.m.— Reception and Luncheon. C O N V E N T IO N ENTERTAINERS Treasurer SMITH W . F. Smith Jr., pres.. First N a t'l, Q u anah, is the TBA treas. He joined his bank in 1959 as a.v .p ., w as nam ed to its board in 1960 and advanced to pres, in 1965. J 04 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis JO H N N Y RODRIGUEZ TA M M Y WYNETTE MID-CONTINENT BA N KER fo r April, 1 9 7 6 Howdoes the energy capital move its energy? Helping it reach its destination is First City National Bank. Some thirty underground pipelines carry Texas Gulf Coast resources to major U .S. cities thousands of miles away. These pipelines move millions of gallons of oil, natural gas, petrochemicals and other liquid products. This area of Texas has become one of the nation’s most important oil and gas transmission centers — connecting the products of plants and refineries along the Houston Ship Channel with inland desti nations as far away as New York City. One-quarter of the nation’s major pipeline companies moving natural gas are found in Houston. Together these 14 companies operate more than 12 2 ,0 0 0 miles of natural gas pipeline. First City National Bank uses its financial strength to help move Texas Gulf Coast resources. This involvement has taught us even more about the energy field. And what we know is yours for the asking. We’re becoming involved with more and more industries every day. And we’re MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis proving to correspondents that more ser vice is the result of more experience. Understanding business as well as bank ing has made us . . . A major financial strength behind Texas industry. F IR S T CM Y N A TIO N A L BANK OF HOUSTON 105 A Variety of Notable Figures Slated for El Paso Convention E L PASO—A variety of noted world and local figures are scheduled to ap pear during the Texas Bankers conven tion, May 2-4. A reception for all convention-goers will be held Sunday evening, May 2, followed by an evening at the grey hound races at Juarez Racetrack. A “very important Washingtonian,” as yet unnamed, is tentatively sched uled to address the convention. Be cause of his heavy demands and shortrange planning, it wasn’t known at press time if he would be able to ap pear. Dr. N. C. Hightower, gastroenterol ogist from Temple’s Scott & White Clinic & Hospital, will address the Monday, May 3, business session. His topic will be “The Four ‘H’ Club— Could Bankers Qualify?” The luncheon speaker that day will be Art Linkletter, who is international ly known for his timely and humorous talks, while country-western music stars Tammy Wynette and Johnny Rodriguez will provide the entertainment for that evening’s dinner-dance. Texas Governor Dolph Briscoe will be the featured speaker during Tues day morning’s business session. The program chairman for this year’s TBA convention is S. R. Greenwood, president, Temple National, and TBA vice president. E L PASO—A special women’s pro gram has been planned for this year’s Texas Bankers Association convention. On Monday, May 3, from 9 a.m. to 12 noon, a hospitality room will be open, with a continental breakfast served. That will be followed by a choice of tours: Old El Paso, shopping or a decorator showcase home. The following morning will begin with a 9:3 0 brunch featuring a style show, mariachi band and Ballet Folkló rico. A tour to the Camino Real, Juarez, and shopping at the Juarez Pronof Center will be conducted by chartered bus. B JO E V. V ILLA RREA L has been elected assistant vice president, Frost National, San Antonio. He joined the bank in 1972 and manages the cost and planning department, B ryan W illiam sfim ake things happen .____ I IflU B B O C K M 2 ¡ a t io n a l |*|| B ank w w i M A IN AND TEXAS LUBBOCK, TEXAS MEMBER FDI C 106 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis AUSTIN— Construction on the new headquarters building of the Texas Bankers Association has begun, with completion expected in late 1976. Cost of the two-story, Texas colonial style building has been set at $600,000. Special Women's Program Set for TBA Convention LINKLETTER (806) 762-8800 Correspondent Banking Texas Bankers Association Building New Headquarters The site for the structure was pur chased for $399,000 and is immediately south of the governor’s mansion. The building also will have under ground basement parking and storage. This reportedly will be the first time in the TBA’s history that the association will occupy its own building. fl F IR S T CITY NATIONAL, El Paso, has organized three new departments under Senior Vice President Granville M. Green. They are: national accounts, headed by Assistant Vice President Lester L. Parker Jr.; correspondent banking, directed by Assistant Cashier Robert I. I. Bondi; and metropolitan banking, supervised by Assistant Cash ier Steve DeGroat. Mr. Green joined the bank in 1961; Mr. Parker went there in 1970 and Messrs. DeGroat and Bondi in 1973. Mr. Bondi recently took an intensive training course with the regional correspondent banking divi sion of First City National, Houston. B R O BERT W. SEAL has been ad vanced from executive vice president to president of National Bank of Com merce, San Antonio. He succeeds Rich ard W. Calvert, who has been elected chairman and CEO. The former chair man, John M. Bennett Jr., has been named executive committee chairman, and James C. Wishart has been ap pointed board secretary. fl DONALD W. GAILEY has been elected assistant vice president, com mercial loan department, First Na tional, Amarillo. He will concentrate on agribusiness lending. Prior to joining First National, Mr. Gailey was with Texas Commerce Bank, Lubbock, and First National, Dallas. MID-CONTINENT BA N K ER fo r April, 1 9 7 6 Serving Correspondent Bankers in the Great Southwest -, rnmesT. Denton, Jr. G ran t KoVUngsW°v ^ '» » u of ia £ ”^ . 0 T H E https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Oscar C. Lindemann C a rm an of the ia From bonds to transit to trust. From Arkansas to the Texas Valley. These are the men you need to know. If you have a question, they’ll have the answer. Texas Bank Professionals. T E X A S MID-CONTINENT BA N K ER fo r April, 1 9 7 6 'r Texas Bank and Trust Company of Dallas. One Main Place, Dallas, Texas 75250. Member FDIC. B A N K ■ A First City Bancorporation Member 107 LEFT: El Paso skyline is backgrounded by Sierra M adre M ountains, located across Rio G rande River in Mexico. RIGHT: Panoram ic view o f Grand H all in El Paso Civic Center, site o f TBA convention M a y 2-4. TBA Convention Returns to El Paso E L PASO and its citizens are pre paring to provide an encore to Texas bankers as they await the return of the Texas Bankers Association an nual convention May 2-4. The TBA met in El Paso’s Civic Center just three years ago, ending a 46-year hiatus. Although E l Paso is officially 102 years old this year, it traces its begin nings back to 1536, when Spanish ex plorers came through the area, which boasts the lowest elevation all-weather pass through the Rocky Mountains. E l Paso was a small trading center through the Mexican revolt against Spain. Its residents were on the side of independence for Texas during the time statehood was being considered. In 1848, the U. S. Army established the Post of E l Paso and the area has grown ever since. C O V E R PH OTO : E l Paso’s skyline is dominated this year by huge American flag on sides of State National Bank Building in honor of U. S. bicentennial. Greatest population growth has oc curred in El Paso’s sister city, Juarez, located just across the Rio Grande River in Mexico. Juarez now includes some half-million people, while El Paso records 350,000. “Bienvenidos” has always been the welcoming salutation in El Paso, and the city is known for its southwestern hospitality, flavored by its proximity to Mexico. E l Paso is surrounded by the Frank lin Mountains, the southernmost portion of the Rockies. While the city’s eleva tion is 3,700 feet, peaks up to 7,000 Colorful Juarez Beckons Bankers Bankers attending the TBA convention in El Paso will find color and excitement across the Rio Grande in Juarez, Mexico, with its city market and street markets stacked high with produce, crafts, pottery, weaving and clothing. Shops offer leather goods, silver, souvenirs or imported items, such as perfumes. Mexican food is sold by street vendors or it can be obtained in fashionable restaurants. Glass-blowers and woodcarvers demonstrate their trades to the public, and Mexican cabarets feature entertainment at night. Bullfights are held almost every Sunday afternoon in the spring and summer, and dog races are held at Juarez Race Track. Juarez, which is the largest Mexican border city, offers numerous guided tours through various travel agencies and bus lines in El Paso. To get from El Paso to Juarez is simple, just cross one of the two bridges by foot, car or streetcar. No visa or passport is needed. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ___ feet are inside the city limits and one of the more popular tourist attractions is a tramway ride to Ranger Peak, from which portions of two states and two nations can be seen. El Paso’s natural resources include 60,000 acres of irrigated farmland. Nat ural gas and crude oil from the sur rounding area are processed in El Paso; 2.5 million pounds of cement are pro duced daily; and 108 deep wells and the Rio Grande River supply city water. The area includes the largest pine forests in the nation and mining opera tions are conducted to the west and south of the city. The area has produced a third of all the silver mined in the world in the last 400 years and the largest U. S. deposit of potash is mined about 140 miles east of the city. Granite, rock and marble quarries, and extensive sand and gravel mining operations are conducted in E l Paso County. To the north are the greatest coal deposits west of the Mississippi River. E l Paso’s trade area includes West Texas, Southeastern Arizona, New Mex ico and the state of Chihuahua in Mexico. Area population is about five million. Fort Bliss is the major military base in the area. It serves as the air defense training center for the free world. Tourist attractions include Tigua In dian Craft Shop and Museum; Fort Bliss Replica Museum, the Hueco Tanks Park and Butterfield Stage stop; Cavalry Museum; and Trans-Mountain Highway Drive, which crosses mile- MID-CONTINENT BA N K ER fo r April, 1 9 7 6 for correspondent banking we're your people... We're professionals, and we like to think we're resourceful. We're good listeners, because we know that's the only way to arrive at a full understanding of your correspondent banking needs. And we're devoted to the development of original programs, unique services and efficient problem-solving methods to benefit our correspondents and their customers. ^ Whatever your Southwestern correspondent needs may be, let us help you soon. We care about you and your bank. From left: Bob B ondi, Bill G reen, Les Parker, C ecilia Lang, Steve D eG roat. STANTON AT MAIN • EL PASO, TEXAS 79901 915/544-1700 • Member FDIC MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FIRST CITY NATIONAL BANK OFEL PASO 109 high Smugglers Gap via a 190-foot cut through solid granite. Most historic of the old missions are the Ciudad Juarez Guadalupe Mission, founded in 1659; Ysleta Mission, founded in 1681; and the more recent Socorro and San Elizario missions, es tablished in the early 1770s. Cultural activities include the El Paso Symphony, art museum and the Chamizal National Memorial, a new center for cultural productions, activi ties and exhibits. The Memorial was opened since the last TBA convention met in El Paso. The convention will be held in the city’s $20 million Civic and Convention Center, which opened its doors in late 1972. The center includes a $7 million theater-auditorium, 95,000 square foot assembly-exhibition hall and a Chamber of Commerce building. Two levels of parking under the plaza and exhibition building provide space for more than 1,200 cars. Up to 7,000 delegates can be accommodated in the center. More than 80 hotels and motels serve El Paso visitors, with a capacity of 6,000. El Paso plans to go all out to wel come the return of TBA next month. ■ FRO ST BANK, San Antonio, hosted 2,375 people at a matinee performance of the San Antonio Stock Show and Rodeo. The event is a 24-year tradition at the bank, and guests included Frost Bank staff members and families and bankers from throughout Texas and Mexico. After the performance, a recep tion and dinner were held in the Frost Bank Tower Plaza Club for 550 visiting bankers. ■ F IR S T NATIONAL, Amarillo, has redrawn plans for its new banking com plex to include nearly twice the area for parking as proposed originally. The bank will have a four-level parking garage that will accommodate 327 cars. The garage also will include a full base ment for storage and will have a cen trally located, skylight-covered 24-hour teller. A tunnel will lead from there to the main building. The garage’s exterior will match that of the bank, with earthtone brick. Completion is slated for early 1977. 110 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis folio. Prior to joining Texas Commerce Bank, he served with a bank in Cali fornia. ■ C. LA MAR G EM BERLIN G has been named assistant vice president and trust officer at Fort Worth Nation al. He joined the bank last January and formerly was vice president and trust tax department manager with National Bank, South Bend, Ind. JUSTICE MANKER ■ JAM ES HARRISON DAVIS has joined First City National, Houston, as vice president. He most recently was with Exxon Co., U. S. A., public affairs department. In addition, First City Na tional has named Richard G. Rundell trust investment officer. He joined the bank last year. DUNLAP HEILIGBRODT ■ JO E JU ST IC E has joined the cor respondent banking and southwestern accounts department of Texas Bank, Dallas, as vice president. He has 10 years’ banking experience and formerly was with First City National, E l Paso. In his new position, Mr. Justice will serve west and southwest Texas, New Mexico and Oklahoma. ■ F IR S T NATIONAL, Dallas, antici pating a resumption of real estate de velopment in its area, has restructured its real estate division. Myron W. Manker, senior vice president, has been named as its head, to handle the de partment’s daily activities. A. G. W al lace, senior vice president, will direct expansion of financial services to the industry. Succeeding Mr. Manker as correspondent head is Charles Dunlap, vice president. Mr. Manker is an engi neer who worked on the Apollo-Saturn space project for two years prior to joining the bank in 1970. He served in the credit department and the national division before entering the correspon dent division in 1974. Mr. Dunlap joined the bank in 1969, advancing to vice president in 1974. Since joining the correspondent department in 1973, he has supervised most of its activities in the Southwest and in major eastern cities. ■ L. W ILLIAM H EILIG BR O D T, ex ecutive vice president and senior loan officer, has been elected president, Texas Commerce Bank, Plouston. He succeeds John T. Cater, who resigned for personal reasons. In his former posi tion, Mr. Heiligbrodt was instrumental in establishing bank lending policies and was responsible for its loan port ■ DAVID L. PARKS has been ad vanced from assistant vice president to vice president at Parker Square Bank, Wichita Falls. He joined the bank last year, after serving Associates Capital Corp. 15 years. Fair Park N a t'I of Dallas Is C ite d fo r Radio S pot The Dallas American Revolution B i centennial Corp. has presented its Spirit of ’76 Award to Fair Park National, Dallas, in recognition of the bank’s bicentennial radio program, “I Am Thankful to Be an American.” Purpose of the award is to recognize those making outstanding contributions through bicentennial activities of 1975. The twice-daily program, which has been on the air since last June, has continuously reflected the day-by-day activities of colonial life. Each segment is written and produced by the staff of the radio station broadcasting the pro gram and the concept for “I Am Thank ful to Be an American” was created by the bank’s advertising director, Sue Smith. Richard Cobb, pres., Fair Park N a t'l, Dallas, holds Spirit of '76 A w a rd bank received from Dallas Am erican Revolution Bicentennial Corp. A w a rd was to honor bank's radio spots, " I Am Thankful to Be an A m erican," which continu ously reflect d a y -b y -d a y activities of colonial life. MID-CONTINENT BA N K ER fo r April, 1 9 7 6 W e’ll double that T exassize invite. W e’ll show you two flags in red, white, and blue lights. Each nearly the size of a football field. One facing the rest of our Nation, the other reminding M exico w e’re here. W e’re helping our international community celeb rate Am erica. With unity. With confidence. With respect. What b etter way than to fly the colors of our flag? They’re on our building, the S ta te National Plaza Tow er, El P a so ’s tallest. Each 156-by-242-foot flag rises from our eighth to our tw entieth floor. T h ese flags are lighting up W est T exas every night during 1976. loin us. Let’s All Help Celebrate America. StateNational A PanNational Group Bank MID-CONTINENT BA N K ER fo r A pril, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BURY YOUR DELAYED GRAIN DRAFT COLLECTIONS Our unique collection system gives all banks immediate, one-day credit. If you have a customer who ships grain through Hutchinson, we have a collection system that can save you time and money. With an account relationship at the First, you can eliminate float and stop losing the ability to invest funds. A draft mailed right to us will be paid the day of receipt. You won’t have to wait three days, four days or a week. Your funds will be available to invest, usually the day after you’ve mailed your draft. Think, for a minute, how that will increase your bottom line at the end of a year! To discuss how your bank can benefit from this unique, one-day collection system, call Gary Karrer at our New Correspondent Center. (316) 663-1521 I !2 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BA N K ER fo r April, 1 9 7 6 Kansas Convention Wichita, May 5-7 Headquarters—Century II PROGRAM FIRST SESSION, 2:15 p.m., May 6 Welcome—JO E STOUT, convention chairman, and vice president-corre spondent officer, Fourth National, Wichita. Invocation—TH E R EV EREN D FRANK KIK, pastor, Eastminster United Presbyterian Church, Wichita. Commentary of the President—J. R. AYRES, KRA president, and presi dent, Citizens State, Miltonvale. 50-Year Club Inductions—FLOYD V. PINNICK, KRA president-elect, and president, Grant County State, Ulysses. American Bankers Association Elections— LINTON C. LU LL, American Bankers Association state vice president, and president, Smith County State, Smith Center. Address—“The Restructuring of Financial Institutions”—W. LIDDON M cPETERS, American Bankers Association president-elect, and presi dent, Security Bank, Corinth, Miss. SECOND SESSION, 10 a.m., May 7 Installation of Officers and Regional Representatives. Silent Tribute to Former Presidents. Address—“Management/Marketing Future Shock”— MORRIS E. MAS SEY, associate dean and associate professor of marketing, University of Colorado-Boulder. President President-Elect Treasurer AYRES J. R. Ayres, KBA pres., is pres., Citizens State, M iltonvale, which he helped organize in 1946. He began his banking career w ith G re e n le a f State 38 years ago. PIN N IC K Floyd V. Pinnick, KBA pres.-elect, is pres., G rant County State, Ulysses, which he joined in 1931. He le ft G rant County State in 1936, returning in 1953. From that tim e, he has served as the bank's m anaging officer. MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BARTELS James Bartels, KBA treas., is ch. and pres., Farmers State, Hays, and Bushton State. He began his banking career w ith Commerce Bank of Kansas City, M o., 1947, advancing to v.p. and correspondent head before he left in 1970. 113 McPeters, Massey, Hanzlik Are KBA Convention Speakers At Century II, W ichita, M ay 5 - 7 With the upcoming presidential elec tions, the chosen theme for the 1976 Kansas Bankers Association is “Caucus ’76.” May 5-7 is the date and Wichita’s Century II is the site for the event. Spotlighted speakers during this year’s Kansas convention are W. Liddon McPeters, American Bankers Associa tion president-elect, and president, Se curity Bank, Corinth, Miss., whose topic will be “The Restructuring of F i nancial Institutions.” Speaking on “Man agement/ Marketing F u tu r e Shock” will be Morris E. Massey, associate dean and associate professor of market ing, University of Colorado-Boulder, while Robert Hanzlik of American Phy sical Fitness, Inc., Palo Alto, Calif., will discuss “Fitness for Busy People” at the men’s breakfast. A 7 a.m. men’s golf tournament is slated as the opening event of the con vention on May 5. Wichita Country Club will host the banker-golfers. Convention registration will begin at 8 a.m. at the entrance to the Exhibition Hall of the Century II. A women’s “Witness Wichita Bus Tour,” presented by the Junior League of Wichita, will begin at 12:45 Wednesday, May 5. Presented will be historical and modern-day Wichita, while a midway stop for tea at the Wichita Art Museum is planned. The “Caucus ’76” welcome party in the Century II Convention Hall is sched uled as the day’s final event. It will include a social hour, buffet and danc ing to the music of the Newton Graber Trio. Registration at the entrance to the Century II Exhibition Hall will con tinue throughout the convention’s sec ond day, Thursday, May 6, beginning at 8 a.m. At the same time, the govern Chairpersons of events for KBA convention are pictured a t planning session. Seated, from I., are V iv ia n Igo, M a rily n Glass, Joe Stout, D avid M oore, Joan H ubbard and Patty H efner, KBA sec. Standing, from I., are Burton Black, N e w t M a le , Terry Keller, Kenneth Nohe, C. W. Barber, Jim Loomis, Fred M cM illen, Steve Hutchens, Beth Rains and Dean Becker. N ot pictured a re Jim Aronis and M ike Astle. ing council breakfast meeting will be gin in the Plaza Room of the Broadview Hotel. A May 6 women’s luncheon is slated for 11:45 in the Century II Exhibition Hall. Following the luncheon will be a choral program by the Singing Quakers of Friends University, Wichita, with Cecil Riney directing. Three concurrent luncheons will be held at 12:15, May 6: the Schools of Banking luncheon at the Lancers Club, with a panel discussion on banking schools planned, and the YBOK will dine in the Wichita Club, as will the 50-Year Club. A women’s shopping tour will leave the Century II at 1:30 for the Towne East Square, returning at 4:30. The all-convention party is set to begin with a social hour in the Century II Convention Hall at 6 p.m., followed one hour later by dinner in the Ex hibition Hall. At 8:30, the theater party will commence in the Concert Hall, with entertainment by Jack Morton Productions: the Spurrlows, a singing and dancing group; Tulara Lee, singer, and Don Rice III, comedian. Dancing is scheduled for 10-12 midnight in the Convention Speakers McPETERS HAN ZLIK MASSEY These three speakers w ill a p p e a r a t the Kansas convention in W ichita. They are (from I.) W . Liddon McPeters, ABA president-elect, and pres., Security Bank, Corinth, Miss.; Robert H an zlik of A m erican Physical Fitness, Inc., Palo A lto, C alif.; and M orris E. M assey, associate dean and associate professor o f m ktg., University of C olorado-Boulder. I 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Convention Hall, with music by New ton Graber’s Orchestra. A men’s 7:30 a.m. breakfast will kick off the events of Friday, May 7. A featured convention speaker, Mr. Hanz lik, will be on hand to discuss “Fitness for Busy People,” after which golf tournament prizes will be awarded. Topping off the KBA convention schedule that day will be a noon cham pagne luncheon in the Convention Hall. Committee chairmen. General chair man for the convention is Joe Stout, vice president-correspondent officer, Fourth National, Wichita. Committee chairpersons, all from Wichita—except where indicated— are Vivian Igo, secretary-manager, Wichita Clearing House—budget; Jim Loomis, cashier, National Bank— champagne brunch; Steve Hutchens, vice president and cashier, Seneca State—facilities; Burton Black, director, Chisholm Trail State— 50-Year Club; W . Newton Male, executive vice president, Prairie State, Augusta—Flying Kansas Bankers; James T. Aronis, vice president-marketing, Fourth National— golf; Joan Hubbard, assistant vice president and Towne East Bank manager, Fourth National and Marilyn Glass of Wichita State— women’s activities; Dean Becker, vice president, First National—men’s break fast; Michael V. Astle, vice president, Central State—publicity; Terry Keller, Union National—registration and hous ing; Beth Rains, senior vice president and cashier, Twin Lakes State— schools of banking; Kenneth Nohe, vice presi dent, general counsel and trust officer, United American State—Thursday night entertainment; Fred L. McMillen, as sistant vice president, Boulevard State —Thursday night social banquet; C. W. Barber, vice president, Kansas State— welcome party; and David W . Moore, vice president and cashier, City Na tional—YBOK. MID-CONTINENT BA N K ER fo r April, 1 9 7 6 DON BARNES MAX DICKERSON FRED DUNMIRE BERNARD RUYSSER P R O G R E S S IS O U R SPIRIT O F * 7 6 * at the BOB LOYD JACK MUELLER 1 9 7 6 ^ KBA $ C o n v e n tio n M ay JACK MARKEY 5 - 7 in JOHN STRUBE WICHITA! v, A sk Us A b o u t a # BflNKMflTIC® V JIM HEFLEY a n d our new FARRELL McATEE AUTOMATED PAYROLL DEPOSIT PACKAGE! W e ’l l E x p e c t Y o u A t th e G a lle r y R o o m H o lid a y In n P la z a ! CNB 6th & Minnesota Avenue • Kansas City, Kansas 66101 MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COMMERCIAL *& NATIONAL A BANK • 371-0035 • Member F.D.I.C. 1 IS 12 Officers to Retire From KBA Gov. Council Marshall, Stoskopf to Run For Kansas BA Positions Twelve officers will retire from the KBA Governing Council this year. Of that number, six are regional vice presi dents. Retiring regional vice presidents are John A. Adair, chairman, president and trust officer, Exchange National, Atchi son; John G. McNay, president, City National, Pittsburg; Charles E. Grutzmacher, president, First National, Onaga; John Suellentrop, president, State Bank, Colwich; C. N. Hoffman Jr., president, National Bank of Amer ica, Salina; and Voyle E. Chance, pres ident, Fowler State. Retiring one-year appointees are Clyde Graeber, president, Leavenworth National; Charles Wayman, chairman and president, Emporia State; E. A. Morse, president, Citizens Bank, Abi lene; Adolyn Bartels, president, Bank of Inman; Jay Jelinek, president, Munden State; and Dick Stevens, pres ident, Garden National, Garden City. Elwood Marshall, president, Home National, Eureka, is the candidate for president-elect of the Kansas Bankers Association, while Duane M. Stoskopf, president and chairman, Kendall State, Valley Falls, is running for KBA treasurer. ADAIR GRUTZMACHER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M cNA Y CHANCE HOFFMAN LEAR MARSHALL STOSKOPF Besides serving with Home National, Mr. Marshall is a director of Kansas Bankers Surety Co. and Kansas De velopment Credit Corp., both of To peka. In the KBA, he has been treasur er (1974 -7 5 ), a section leader at Bank Management Commission meetings, chairman of the Bank Marketing Com mission and its seminars and a member of the KBA Free Enterprise Advocacy Task Force. Mr. Stoskopf began his banking ca reer with Bazine State in 1963. In 1964, lie joined First National, Salina, where he served as vice president and assistant trust officer until going to Hutchinson National in 1969. At Hutchinson National, Mr. Stoskopf was vice president, agricultural loans and correspondent banking. He joined his present bank as president and chairman in 1971. Mr. Stoskopf has served as chairman of the KBA Agricultural Committee. BLANCHARD dent. Mr. Blanchard moved up to presi dent in 1961 and chairman in 1970. He headed the Kansas Bankers Association in 1973-74. Fi'ed A. Dunmire, executive vice president, has been elected a di rector. He has been with Commercial National since 1957, and advanced to his present position in 1970. He has been responsible for the bank’s com mercial division lending functions for nine years and had been an advisory director since 1972. He also is presi dent, State Bank, Springhill, and a di rector, Lenexa State. 150 to 150,000th: B icentennial Dollars Used To C e le b ra te A n n ive rsa ry Merchants National, Topeka, tied in the nation’s 200th birthday with the first anniversary of its White Lakes F a cility. The bank awarded 150 bicentennial silver dollars to the 150,000th customer to use the facility. The award climaxed week-long festivities that included giv ing every 10th customer who entered the White Lakes Facility a bicentennial silver dollar. Also, everyone who opened a new checking or savings account re ceived one of the dollars. ■ CHARLES W. LEAR has joined First National, Hutchinson, as exec utive vice president and a director. He comes from Bank of Springfield, Mo., which he joined in 1969 as president. Before that, Mr. Lear spent 20 years with First National, Salina, in various executive capacities. Besides being president, Bank of Springfield, he was on the boards of two other Missouri banks, Peoples Bank, Branson, and Bank of Kimberling City. ■ HENRY G. BLANCHARD has re tired from Commercial National, Kan sas City, where he was chairman. He joined the bank in 1947 and was as signed to head the correspondent bank department. He served there until 1953, when he became executive vice presi- O liver H. Hughes (r.), ch., M erchants N a t l, Topeka, presents sack of 150 bicentennial silver dollars to Francis X. Specht, who w as 150,000th customer to use bank's W hite Lakes Facility. A t I. is James M a i, fa cility mgr. Presentation w as m ade during facilty's firstanniversary celebration. M r. Specht is gen'l field rep., G overnm ent Employees Insurance Corp., ¡Topeka. MID-CONTINENT BA N KER fo r April, 1 9 7 6 A s p e c ia l in v ita tio n to v is it u s d u r in g th e K B A C o n v e n tio n John Riesen Jim Stanley S in ce 1 9 7 6 is our cen ten n ial year, we would be pleased to have you com e by our bank when you are in Wichita. We have sen t each bank in K ansas a copy of our souvenir history. However, if you would like a personal copy or a copy for som eone else in your bank,- please feel free to pick one up. Dean Thibault Paul Richmond FIRST NATIONAL FIRST IN AGRICULTURAL LOANS In a recent survey compiled by the Ameri can Banker, First National Bank in Wichita, ranked first among banks in K ansas during 1 9 7 5 in total dollars invested in agricultural loans. Please take a few m inutes during your stay in W ichita to com e in and discuss our agricultural lending program. G F.D.I.C. FIRST NATIONAL BANK IN W IC H IT A Correspondent Banking Specialists Since 1876 MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 117 The Fowlers of Kansas: They re Banking s Largest Family I F T H E R E ’S a banking “dynasty” in this country, the Fowler family of Kansas surely is it, with the late James T. Fowler as its founder. Besides estab lishing two banks in the state—Home State, Arcadia, and First State, Arma— and buying control of a third—Citizens Bank, Weir—he became the father of 14 children, six of whom also went into banking. In addition, several sons-inlaw, daughters-in-law and grandchil dren became bankers, and Mr. Fowler’s widow (Ada) is chairman of the banks in Arcadia and Weir. At one time, 23 members of Mr. Fowler’s family were employed in Kansas and Missouri banks. When Mr. Fowler died January 13, 1970, at the age of 96, a life ended that had begun October 12, 1873, in a log cabin on a farm belonging to his father, George Fowler. J. T. Fowler spent most of his long life in the Ar cadia area, except for five years—from age 17 to 22—that he lived in the Pacific Northwest, where he worked in lumber camps and mines. It was there that he learned to use a revolver and became a crack shot with any kind of gun. This expertise stood him in good stead when he returned to Arcadia and opened a mercantile store. Bandits learned to think twice about trying to rob him, especially after he shot one down in his store. After opening the bank in Arcadia, Mr. Fowler again proved his prowess with firearms. One night, he and his brother, John, were alerted to the fact that some men were trying to break open the bank’s safe. The Fowlers led a posse to the scene and each brother was credited with killing one of the burglars. A third desperado escaped. When Mr. Fowler died six years ago, survivors, besides his widow, included all seven of his daughters and six of his sons. One son, George, was killed in a Missouri auto accident in 1954. At the time of his death, Mr. Fowler also had 33 grandchildren and 18 great grandchildren. He had been married twice. His first wife died, leaving him with five children. His second marriage, which produced nine children, was highlighted by the celebration of the Fowlers’ 50th wedding anniversary in 1964. Even after reaching 90, the veteran Kansas banker went to the Arcadia bank every day and worked at the same antique roll-top desk he bought when he started the bank. He also spent 60 years on the board of School District No. 112, retiring at the age of 90. In 1935-36, the Fowler clan was referred to as “banking’s largest family” when it was the subject of articles in the banking press. At that time, the children ranged in age from 33 to two. Currently, the following children of J. T. Fowler are active bank officers: C. G. (Glenn) Fowler, president of the Arcadia bank and vice president of the one in Weir; Doris Stelle, cashier and secretary of the Arcadia bank; R. W. (Bill) Fowler, president, Citizens Bank, Weir; John T. Fowler, senior vice president, correspondent bank division, First National, Kansas City, Mo., and director, Bank of Commerce, Chanute, and First State, Arma; and David Fowler, president, First State, Bur lingame. John T. is a former Federal Reserve Bank examiner, and David once was a national bank examiner. Frances (Peachy) Bedene, a daugh ter, is inactive president, First State, Arma. James V. Fowler, another son, is inactive vice president, Home State, Arcadia. Both also are directors of their banks. A son-in-law, John H. Bedene, is executive vice president and cashier, First State, Arma. Two daughters-inlaw—Wadean Fowler and Bette Fowler — are secretaries, respectively, of the banks in Weir and Burlingame. Two grandsons, John Brent Bedene and Bruce Fowler Bedene, are vice presi dents of the bank in Arma, and their sister, Becky Bedene Bualle, is an in active vice president and a director of the Arma bank. Another grandson, Joe W. Fowler, is cashier, Citizens Bank, Weir. William T. Stelle, also a grand son, has been an examiner for the FD IC and the Fed. James V. Fowler Jr., a grandson, is affiliated with Data Processing, a subsidiary of Seattle-First National. Combined resources of the four Kan sas banks with whom the Fowlers are associated total $19.1 million. Individ ually, these banks’ assets are: Citizens Bank, Weir— $3.2 million; First State, Arma— $2.9 million; First State, Bur lingame— $9.5 million; and Home State, Arcadia— $3.5 million. Laughingly, Doris Stelle describes her family as “neither Catholic nor Irish, but—typical of both the religion and nationality—prolific, loud and boisterous!” She added that her father ruled and disciplined all 14 children “like a trumpet speaking.’ * • Sons and daughters o f late James T. Fowler help him and Mrs. Fowler celebrate their 50th w edd ing anniversary in 1964. Seated w ith couple a re D avid (I.) and John T. Daughters are (I. to r.): Doris Stelle, lone G uthrie, Thelma Renfro, Jo Ferraro, Helen Knoll, Eller Jeter and Frances (Peachy) Bedene. O th er sons are (1. to r.): Paul, R. W . (Bill), James and Glenn. Fowlers' son, George, w as killed in auto accident in 1954. 118 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BA N K ER fo r April, 1 9 7 6 SECURITY NATIO NAL OF KANSAS CITY THINGS WILL BE HAPPENING IN STUDIOS 2610-2612 HOLIDAY INN PLAZA during the 1976 KBA Convention Continuing hospitality that will not conflict with official KBA functions. The Security Team* of Bill Webber—Jay Breidenthal —John Peterson —Bob Fitzpatrick—Ken Domer—Bob McDowell —will be your hosts. L to R : (seated) Chm., W. L. Webber; V.P., W. Robert F itzpatrick; (standing) Pres., Gray Breidenthal; Corr. Officer, Robert N. M cDowell; V.P., John Peterson; Asst. V.P., K. A. Domer; Sr. V.P., R. J. Breidenthal, Jr.; Asst, to Pres., R. R. Domer. T ^ /t C U t c /v F r > 'fy T ftP y T ^ C U t c fv Refreshments, Buffet Thursday, May 6 10:30 AM to 1:00 PM *President Gray Breidenthal and Assistant to the President Bob Domer will also be at some of the meetings. THINGS ARE HAPPENING AT 1 SECURITY NATIONAL BANK OF KANSAS CITY M^ ^ .er 1 S e c u rity Plaza K ansas C ity, K ansas 66117 Dial D ire c t — 9 1 3 -2 8 1 -3 1 6 5 MID-CONTINENT BA N K ER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis i 19 ■ LEEANNA HOW SER has been named assistant cashier, Industrial State, Kansas City. She has been with the bank 22 years and supervises the bookkeeping department. ■ BOB C A FFA R ELLI, formerly vice president, First National, Olathe, has been promoted to senior vice president. C. C. Finney has been advanced from assistant vice president to vice presi dent, and Barbara J. Corrigan, previ ously assistant cashier, has been elected assistant vice president. In addition, Dr. Robert E. Delphia, a local physi cian, has been named a director. ■ GARY R. W ELCH has been named president, Northgate National, Hutch inson, after resigning as commercial loan officer, Hutchinson National. At Northgate National, he succeeds Keith Williamson, who has resigned. Mr. Welch began his banking career in 1963. ■ R O BERT LANGENWALTER, chairman and president, Central State, Wichita, has been named salesman of the year by the Sales and Marketing Executives of Wichita, Inc. Mr. Langenwalter heads the economic develop ment division of the Wichita Area Chamber of Commerce and was cited for his help in obtaining a federal portof-entry permit for the city in 1974. First of Wichita Is 100 W ICHITA— During this bicen tennial year for the U. S., First Na tional here is observing its centen nial. The bank began as Farm er’s & Merchant’s in November, 1876, after another First National (no connec tion with the present bank) failed because it had overextended itself in questionable cattle paper and in constmction of an elaborate build ing. Therefore, the new bank— ac cording to a booklet put out by the present First National— “originated in an atmosphere which demanded a policy of the utmost conserva tism.” Hiram W . Lewis was the first president. In 1882, the bank was reorganized and renamed Kansas National after receiving a national charter. In 1895, Citizens Bank was merged with Kansas National. As the new century arrived, the bank began, in 1900, an association with the banking fam ilies of Berryman, Chandler and Woods that lasts to the present. Stock in the bank owned by James O. Davidson was purchased by J. W . Berryman, Charles Q. Chan dler, E . E . Masterman and W . S. Woods, with Mr. Chandler taking over active control of the bank. In 1919, Kansas National and National Bank of Commerce were consolidat ed as First National in Wichita (to differentiate it from the ill-fated First National of W ichita). Since then, the bank weathered the depression of the 1930s and entered the new age of automation, E FT S and accent on public relations and marketing. The modern-day First National now has another Chandler— C. Q. Ill— as president. Portfolio and Funds Management Is Focus of New ABA School ‘T I S M O R E .... th an L u ck o’ the Iris h that brings about good Correspondent Banking! It’s PEOPLE like our Correspondent Banking Team: Ed Splichal m ftu fc h w s o n m f f a t io n a l b a n k a n d tru st c o m p a n y H U T C H IN S O N , K A N S A S 120 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mem ber F.D .I.C . Lu Alan Willems DALLAS—The ABA has announced its first National School of Bank Invest ments, May 23-29, at Southern Method ist University here. Portfolio and funds management will be the primary area of concentration at the school, while a customized BankSim exercise will be incorporated to re inforce the lecture portion of the course. Registration for the in-residence school will be limited to 150 students. Registration fee is $550, and the cur riculum is designed for bank investment specialists having three to five years’ experience. Registration forms and additional in formation are available from Saundra Currance, registrar, National School of Bank Investments, American Bankers Association, 1120 Connecticut Avenue, N. W., Washington, DC 20036. MID-CONTINENT BA N KER for April, 1 9 7 6 Do You W ant to Buy Control of a Bank? Do You W ant to Sell Control of a Bank? Do You W ant to Make a Start, by Buying a Minority Interest? If your answer to any of the above questions is "Yes'', the man for you to contact is J A S O N V. OTT, President Prescott, Wright, Snider Co. Phone 816 842-3143 Tw enty W e s t N inth Building Kansas C ity , M o . 64105 Since 1885 Our firm has been in the investment banking business since 1885. We can also serve your needs in the fields of Listed Securities, Municipal Bonds, Corporate Bonds, Over-The-Counter Stocks and Mutual Funds. MID-CONTINENT BANKER for April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 121 Kansas Bankers Line U p fo r 'Tee' Time G olf carts are lined op like race cars at the In dianapolis 500 as Kansas bankers prepare to tee off a t the W ig -W a m Country Club in Phoenix. They w ere pa rt of a group of correspondent bankers w ho attended First N atio n a l of Topeka's P ow -W ow Conference a t the A rizona resort. The four d ay event attracted 36 Kansans and their spouses and m ingled business sessions w ith opportunities for relaxatio n such as golf. External Communications to Increase In O ver 3 3% of HCs, Study Shows V ER O NE-THIRD of the HCs in America are planning to increase their external communications during 1976, according to a survey by Ruder & Finn, Inc., financial public relations counseling firm. Nearly all HCs will at least maintain their present level, the study also points out. Ruder & Finn conducted the survey among 234 leading HCs. The firm re ceived 42 responses— 18%—from com panies with assets ranging from $60 million to $25 billion. The competitive edge. When your business plans to locate or expan d in G reat B end, we ask you to talk with our person able officers w ho represent 180 years o f financial ex perience. Our com petitive loan rates and quality banking service are the result o f sound m anagem ent, fust w hat y ou ’re seeking. Specific areas said to be destined for greater attention this year are stock holder communications and security analyst contact. Particular emphasis was placed on meetings with brokers and on formal analyst-society presenta tions. Nearly all HCs indicating in creased activity announced PR budgets in excess of $50,000 annually. Regarding aspects of HCs to be high lighted in future communications, there was an inclination shown toward stress ing total financial services. The feeling was expressed by many that there is a need to overcome investor loss of con fidence in banks and banking institu tions. HCs also plan to emphasize their traditional banking activities, the re search shows. This is due to the associ ation most have with their lead banks, and understanding of and confidence in those institutions materially affects how the HC is perceived by all its key audiences. What are the problems foreseen for bank HCs during 1976? Ruder & Finn found strengthened capital base to be the most important, with 79% of the respondents placing that at the top of the list. Debt was shown to be the pre ferred vehicle over equity by a two-toone margin. Other perceived problems that ranked near the top of the list were loan losses, loss of investor confidence, R E IT investments and relations with regulatory agencies. Half the respondents said the HC president appears as a spokesman be fore local community groups. Most of the companies indicated they met with the local press at least regularly or oc casionally, while 71% reported regular contact with the banking trade press. Sixty percent meet regularly with the national media. The most commonly mentioned eco nomic issues facing HCs in 1976 were seen to be (in order of occurrence) con tinued effects of inflation and govern ment spending, unemployment and its impact on deposits and consumer loan demand, weakness in bank equity mar kets, lagging commercial loan demand, cost of increased customer services, in terest-rate ceilings and financial-com munity support. * * A B A To C o n d u c t Survey O n C o rp o ra te R esponsibility Main Bank, 17th & Main Westgate Bank, Broadway at K-96 Great Bend, Kansas 316-792-2521 122 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The American Bankers Association has asked 2,600 banks to participate in a survey to again assess the industry’s involvement in corporate social re sponsibility. This is the third such survey the ABA has conducted, the latest being made in 1971. MID-CONTINENT BA N KER fo r April, 1 9 7 6 in v e s tm e n t B a n k in g S in c e 1 8 9 0 U N D E R W R IT E R S - D IS T R IB U T O R S - D E A L E R S GENERAL MARKET MUNICIPAL BONDS S T IF E L , N IC O L A U S INDUSTRIAL, PUBLIC UTILITY, RAILROAD LISTED and UNLISTED BONDS & STOCKS INSURANCE, DEFERRED ANNUITIES & OPTIONS & C O M P A N Y IN C O R P O R A T E D MEMBERS NEW YORK STOCK EXCHANGE, IN C . D ire c t W i r e to AM ERICAN STOCK EXCHANGE, IN C . MIDWEST STOCK EXCHANGE, IN C . t h e E x c h a n g e F lo o rs J ST. LOUIS • ALTON • BLOOMINGTON • CHICAGO • CHICAGO HEIGHTS CLAYTON • IOWA CITY • KANSAS CITY • LOUISVILLE * MEMPHIS • MILWAUKEE • MOLINE OKLAHOMA CITY • TULSA * WICHITA MID-CONTINENT BA N K ER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 123 Prepare N O W for Annual Meetings Booklets That Aid (!) Bank Management • A Code of Ethics. 4 pages. Sample policy statements by two banks, covering personal conduct of officers, inside and outside the bank. Example: sets criteria for conflict of interest, political activity, outside interests, trading in bank stock, gifts and entertainment that can be ac cepted by officers. No. 116, 3 copies $1. • Capital Adequacy. 4 pages. When does a bank have enough capital? Should a bank resist supervisory pressure to increase capital? Should a committee of board mem bers keep abreast of capital requirements for their bank? These and other questions discussed. No. 117, 3 copies for $1. • The Bankers’ Handbook. Considered the most complete and definitive reference source covering current practices. It places the money knowledge of 90 of the country’s (2) Bank Directors (3) Bank Stockholders • Bank Stock Prices. How the price range of a bank’s stock should be de termined is discussed in this four-page study. The pros and cons of high and low stock prices are examined so direc tors can determine where to set the price of their bank’s stock. No. 134, 3 copies for $1. personnel and employees transferring from one position to another. No. 122, $28. • The Effective Branch Manager. This book was written to show ways in which bank branch managers can develop man agement skills which are indispensable for the effective functioning of any branch. It is recognized that management involves several clearly definable functions: plan ning, organizing, motivating, controlling and communicating. Each of these skills is examined and then applied to the specific problems of branch management. No. 128, $14. leading bankers at the fingertips of the banker or businessman, in a concise, ana lytical style. In it are the answers to most of your questions about banking— easy to use. 11 major sections— in 87 chapters. 1230 pages. No. 120, $30.00. • Bank Audits and Examinations. This study, written in non-technical language, is designed to be helpful (1) to an inde pendent accountant engaged to conduct an opinion audit, (2) to an internal bank auditor who wishes to make his work more effective and ( 3 ) to a bank director who wishes to compare procedures followed by his bank with the modern methods out lined. No. 121, $32. • Organizing Jobs in Banking. A practical manual designed for bank officers and de partment managers to use as a guide in defining the duties and responsibilities of every position in the bank. It establishes position qualifications and job specifications and contains suggestions for training new • W hat Every Bank Director Should Know About Bank Counsel. A pithy dis cussion of the advantages and disadvan tages of a bank maintaining full-time coun sel, and whether that counsel should be an elected director. The counsel-director re lationship is also covered— a vital relation ship in these days of complicated legal maneuvering. No. 129, 3 copies for $1. • Management Policies for Commercial Banks. 2nd edition by Howard D. Crosse and George H. Hempel. Substantially re vised edition dealing with major policies of liability and asset management in banks. Includes examples of major policies and the relationship of policy makers and the issuing of policy. Examines lending prac tices, personnel, marketing management and portfolio management and capital structure. No. 131, $15.95. • Management Succession. 8-page study. This has been termed the number one problem in banking. Directors have the legal duty to staff their banks and this publication provides invaluable aids to as sist directors in this area. Includes a com prehensive checklist for management de velopment. No. 133, $1. © W hat Every Bank Director Should Know About Public Relations. A veteran journalist and P R man describes what P R is and how a message can be relayed to the public: how the good works of your bank can be publicized. Includes an ex ample of a deposit-building program that worked; also describes how the bank’s personnel were “sold” on the program, thus insuring its effectiveness. No. 135, 3 copies for $1. • Bank Officer’s Handbook of Commercial Banking Law. Fourth Edition, a complete revision, authorized by Frederick K. Beutel, formerly dean of the University of Louisiana Law School. Twenty-two chapters, plus tables. Contains thorough coverage of the Consumer Credit Protec tion Act, the Uniform Consumer Credit Code, revisions of the Uniform Commer cial Code and all legislation affecting banking. Fully indexed for instant an swers; table of cases; clear, concise, non technical language. No. 136, $32.50. • W hat Every Director Should Know About Personnel Management. One im portant aspect: evaluation of employment policy . . . the director should understand this. Also, each bank should have a re cruitment policy and a general policy with respect to the role of fringe benefits. No. 139, 3 copies for $1. • How to Analyze a Bank Statement. This 5th edition by F . L . Garcia is designed to keep abreast with the remarkable de velopments of recent years: the prolifera tion of bank holding companies, changes in reporting requirements, the growing popularity of bank stocks, and the dis closure of more financial data from banks. For the first time, Professor Garcia has included a special section on the reporting requirements and analysis of bank hold ing company statements. No. 138, $28. • Commercial Problem Loans. A study that makes a significant contribution to improving lending skills by filling a void in the loan department’s litera ture. The problem loan is identified in detail and a program of supervision is outlined. The volume includes a 41page chapter on collecting problem loans and a case study of a fraud that brings all the points discussed into full play. Also included are a complete sample credit file and a hypothetical credit policy statement. Published in 1974. No. 137, $18. O rder by Number Using Coupon on the O pposite Page 124 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis MID-CONTINENT BA N K ER for April. 1 9 7 6 P LA N N IN G Keeps the Bank Board Informed! A few hours of advance planning PAYS OFF in the meeting. • This 28-page booklet provides some workable agendas, suggestions for advance planning and also lists types of reports that a board should re ceive monthly and periodically. It emphasizes the need for properly in forming the board as quickly and as concisely as possible. The booklet will serve as an excellent supplement to PLANS that your bank already has made for its board meetings. Check Box No. I l l , $ 2 .9 0 per copy OTHER MANAGEMENT-DIRECTOR MANUALS • Bank Directors and Their Selection, Qualifications, Evaluation, Retirement. 24 pages. Answers key questions concerning director selection, retention and retire ment. Special section: the prospective di rector and how he should be expected to contribute to the bank’s success. No. 101, $2.65 per copy. • Bank Shareholders’ Meeting Manual. 60 pages, 8/2 x 11". Designed to aid directors of state-chartered banks, this book dis cusses conflict of interest, minority rights, fuller disclosure, voting of trust-held se curities, preparation of stock purchase and stock option plans, also capital notes and debentures. The manual also is helpful in updating annual shareholders’ meetings at a time when stockholders are becoming more in sistent on receiving meaningful information at annual meetings and in annual reports. No. 102, $7.75 each. • A Model Policy for the Bank’s Board of Directors. 24-pages, reviews typical organizational chart, duties and responsi bilities of managing officers and various standing committees, loan, investment and collection policies, and an outline of a suggested investment policy. No. 103, $2.65 per copy. • Annual Review for Officer Promotions. 4-page study, contains 12 point-by-point appraisals of officer performance and potentials. No. 104, 3 copies for $1. • Check List of Audit Procedures for Directors’ Examination. 23-part outline en compasses review of major audit cate gories. Special 4-page study. No. 105, 3 copies for $ 1. • Bank Board Policy and the Preroga tives of Operating Management. Special study focuses on utilization of skills and knowledge of “outside” directors; should the board do more than merely set policy?; who should operate the bank—the https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis board or management? No. 106, 3 copies for $ 1. • The Board of Directors and Effective Management. Harold Koontz, 256 pages. Critical look at directors’ role: functions and responsibilities, decision areas, control, relationship of success to more productive management. No. 107, $13.25 per copy. • Deferred Compensation Plan for Direc tors. Explanation of an important IRS Ruling that will allow your directors to collect directors fees after retirement, thus offering substantial tax savings. No. 108, 3 copies for $1. • A Business Development Policy. A plan for the small bank in setting up objectives and establishing responsibilities in the of ficer staff for getting new business, holding present business. No. 109, 3 copies for $1. • SALES: How Bank Directors Can Help. Detailed outline of a program that has developed more than $40 million in new business for a holding company chain in the Southeast. No. 110, 3 copies for $1. • The Bank Board and Loan Policy. This 28-page booklet discusses the reasons for a bank having a written loan policy. The booklet presents loan policies in use by two well-managed banks that will aid your bank in establishing broad guidelines for your lending officers (particularly junior staff officers) so they will not be in the dark concerning bank loan policy. No. 113, $2.90 per copy. • How to Prepare for Kidnap/Extortion Threats. 4-page study, outlines security precautions to take at the bank and at home, sample “alert” system, action to take during and after threat. No. 114, 3 copies for $1. SEE O PPO SITE P A G E FOR OTHER T O P ICS Please Send These Management Aids: 101 . . . . copies $ .... 117 . . . . copies $ 102 . . . . copies $ .... 120 . . . . copies $ Send Completed Coupon W ITH CHECK 121 . . . . copies to: Commerce Publishing Co., 408 Olive 103 . . . . copies $ .... 122 . . . . copies $ $ 104 . . . . copies $ .... 128 . . . . copies $ 105 . . . . copies $ .... 129 . . . . copies $ 131 . . . . copies $ 106 . . . copies $ .... 133 . . . . copies $ 107 . . . copies $ .... 134 . . . . copies $ 135 . . . . copies $ $ 108 . . . copies $ .... 136 . . . . copies 109 . . . copies $ .... 137 . . . . copies $ NO . .. copies $ .... 138 . . . copies $ I ll copies $ .... ... 113 . . . copies $ .... 114 . . . copies $ .... 139 . . . . copies $ Total $ (In Missouri add 4 '/2% Tax) St., St. Louis, Mo. 63102, publishers of The BANK BOARD Letter, Mid-Continent Banker and Mid-Western Banker. Enclose check payable to The BANK BOARD Letter Name ............................................................. Bank or C o m p a n y ........................................ A ddress........................................................... $ F ro m th e IVIid -C o n tin e n t A r e a Alabama ■ R O B E R T J. BLA CK W ELL has been named president and CEO, Hen derson National, Huntsville. He goes there from First National, Mobile, affili ate bank, where he was senior vice president and investment division man ager. He has been in banking 15 years. ■ F IR S T NATIONAL, Opp, has elect ed James C. Kelsoe, vice president and cashier, and George C. Pierce, vice president, as directors. Mr. Kelsoe joined the bank in 1961 and Mr. Pierce, in 1966. ■ N O RV ELLE LEIG H SM ITH has been elected a diiector of Commercial Guaranty Bank, Mobile. He is con troller of a local bakery. First Woman CEO in Mobile M O BILE— Betty M. Jordan, pres ident and CEO of the new Com monwealth National, reportedly is the first woman to head a Mobile financial institution. The bank, which has been in op eration since February 19, is tem porarily headquartered at 2214 St. Stephens Road, but officials expect to move into permanent quarters later this year. ■ THOMAS C. JOYCE, manager of the Mountain Brook-Office Park Branch of First National, Birmingham, has been promoted to vice president. He joined the bank in 1963. ■ DOROTHY J. GARDNER has been named assistant vice president at First National, Mobile, while Mable Brettel has been elevated to personnel officer. Elected branch officers were Thomas J. McAleer Jr. and Stephen E. Pollman Jr. Tony Van Aken has been promoted to international officer. ■ F IR S T ALABAMA BANK, Mont gomery, has received 21 awards from the Advertising Club of Montgomery for outstanding advertising produced during 1975. The bank’s marketing de partment was presented with seven gold and 14 silver awards during the Advertising Club’s 16th annual awards ceremonies. ■ OPELIKA NATIONAL has elected Walter A. Parrent and S. Frank What ley as directors, filling newly created posts. Both Messrs. Parrent and What ley are senior vice presidents. In addi tion, shareholders have voted to convert Opelika National into a state bank, to be called Bank of East Alabama. Regu latory approval is pending. ■ JO E D. POW ERS has been elected president, chairman and CEO of Union Bank of Benton, succeeding Wilford R. Pruett, who has resigned to accept the post of general vice president for spe cial projects at Utica National, Tulsa. Mr. Powers joined the bank in 1968 as executive vice president and chief Other Commonwealth National officers are George L . Langham, chairman; and E . Malcolm Collins III, vice president and cashier. Mrs. Jordan has 23 years’ bank ing experience with American Na tional, Mobile, where she most re cently served as vice president. She also was administrator for eight American National branches. Mr. Collins began his banking career with Florida First National at Brent, Pensacola, in 1961. In 1970, he was promoted to cashier. Mr. Collins also served 2 years as cashier, W est Orlando (F la .) Bar nett Bank. 126 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis administrative officer. He advanced to vice chairman in 1974. Mr. Powers for merly was with City National, Fort Smith. ■ COM M ERCIAL NATIONAL, Lit tle Rock, has named the following as directors: Betty Baird, president, Baird, Inc., Arkansas Sign and Neon Co. and Bonanza Realty Co.; Richard Hiendlmayr, vice president, Olin Corp.; and Thomas F. “Mack’’ McLartv, president, McLarty Companies. ■ JOHN O. B U TLER II has been pro moted to data processing officer at Twin City Bank, North Little Rock. He joined the bank in 1970 and has served as manager of proof and transit and data processing. ■ RONALD B. JACKSON has been elevated from cashier to vice president and cashier at First National, Jonesboro. He has been with the bank since 1969. Illinois ■ F IR ST GA LESBU RG NATIONAL has announced the promotions of R. Lane Smallwood to vice president and trust officer; Jack Olmstead and John Wilson, to assistant vice presidents and farm managers; and Diane Kingery, to assistant trust officer, operations. ■ SPRING VALLEY CITY BANK is constructing a new Main Office, with completion slated for July 15. Design and construction is being carried out by Bunce Corp., St. Louis. The build ing is of a bi-level design conforming to the contour of its site. Its exterior will feature two-story solar bronze glass panels, sand-colored brick and ano dized extruded aluminum fascias. The interior will have earth-tone colors, bronze-finish metals and natural oak furniture. ■ DAVID A. HEINRICH has joined Millikin National, Decatur, as a com mercial lending officer. He formerly was vice president, loan department, Logan County Bank, Lincoln. HARROW SMITH COMPANY Union N atio n a l Bank Bldg. 5 0 1 /3 7 4 -7 5 5 5 Little Rock, Arkansas J. E. WOMELDORFF, Executive Vice President ■ KEN NETH D. M IL L E R has been named executive vice president and a director of Michigan Avenue National and its HC, Michigan Avenue Financial Group, both of Chicago. He joined the bank in 1960 and previously was senior vice president and controller. MID-CONTINENT BA N K ER fo r April, 1 9 7 6 Sireuter Heads IBA Division Robert Streuter, vice president and consumer credit department manager, City National, Murphysboro, has been elected president, Illinois Bankers Association Con sumer Credit Division. His term commences July 1. Other officers elected were Law rence A. Wilson, vice president, City National, Dixon — first vice president; David G. Siebert, execu tive vice president, First National, Dwight—second vice president; and Norman C. Peterson, assistant secre tary, IBA—secretary. dition, the bank has enlarged its Motor Bank to six lanes and has added a walk-in and a night depository. ■ HENRY K. GARDNER, president, National Boulevard Bank, Chicago, has assumed the additional duties of execu tive committee chairman and CEO, following the resignation of Irving Sea man Jr. Mr. Gardner joined the bank in 1970, going from Continental Illinois National, Chicago. ■ R O B E R T E. O TTERBA C H ER has been elected assistant vice president, Heritage/County Bank, Blue Island. He joined the bank in 1974 and is respon sible for developing new business in the commercial and industrial areas. ■ U N ITED BANK O F ILLIN O IS, Rockford, has moved into its new head quarters, United Center. The new building is located in a downtown plaza and features glass walls and terrazzo floor on the banking level. The second and fourth floors are open for rental, while the third floor houses trust and investment services, safe deposit and cash vault and executive offices. In ad ■ A F FIL IA T E BANKS of United Banks, Rockford, have undergone a name change. Their old and new names are: Ogle County National, Oregon, to United Bank of Ogle County; Central National, Rockford, to United Bank of Illinois; First National, Belvidere, to United Bank of Belvidere; Park State, Loves Park, to United Bank of Loves INEHIEHEO ...the Btsimum luxury accomodations 30 FLOORS OF DRAMATIC SUITES & MASTER BEDROOMS Spacious suite with its own all electric kitchen/bar, theatrical vanity, carpeted mosaic bath. Some suites with Bidet and Grand Piano. Complimentary continental breakfast served in your suite. 1 3 0 0 N. A S TO R ST. C H IC A G O , IL L . 6 0 6 1 0 William C. Wolf, General Manager ( 3 1 2 ) 943-1111 Where you dine in elegance at AAjt/rv'i de PARIS TO W ER H O TE L MID-CONTINENT BA N KER fo r April, 1 9 7 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Park; Southgate Bank, Rockford, to United Bank of Southgate; and State Bank, Rockford, to United Bank of Rockford. In addition, the HC has adopted a new logo featuring the letter “U.” ■ NATIONAL BANK OF MON MOUTH has connected an adjacent building to its main quarters to provide for greater installment loan, commercial loan and trust services. The new wing also houses an employees’ room and an enlarged directors’ room. The converted space is decorated in the same manner as the older bank offices, with walnut wainscoat paneling and carpeted floors. Planner and construction manager for the project was Bunce Corp., St. Louis. ■ F IR S T NATIONAL, Chicago, has promoted the following to vice presi dents: Gary J. Campbell, Joseph J. Gillings Jr. and Lewis H. Harmon. Alexander Hart, vice president, has been named to head the BankAmericard division, while Thomas Sheehy and Nels Johnson, both vice presidents, have been transferred to the traveling auditors division. Mr. Sheehy will head the division. ■ CONTINENTAL ILLIN O IS NA TIONAL, Chicago, has named the fol lowing vice presidents: William D. 'What makes thex Taft Hotel the best for business and pleasure? Its Location. Right at your doorstep are theatres, restaurants, shops, transportation. R ock efeller C en te r, Radio City Music Hall, Central Park and Lincoln Cente r are within minutes of your room. And what accommod atio ns! 2 , 0 0 0 magnifi cent air conditioned rooms and suites. T h e T a ft, home of the Cattleman West and Enrico & Paglieri restauran ts. Singles from $ 2 0 . 0 0 . Doubles from $ 2 5 . 0 0 . Special family rates. Parking available. It all makes New Y o rk a nice place to visit. Anytime. TO LL FREE TELEPHONE 8 0 0 - 2 2 3 -9 8 4 4 For re s e rv a tio n s or in fo rm atio n , call you r tra ve l a gen t or Hotel Ta ft, 7th A ve n u e and 50th Street, N ew Y o rk 10019 Phone (2 1 2 ) 247-4000 V_________ ______________________ J 127 Snider, commercial banking; Gerald J. Sanford and John L. Sebesta, con troller’s division, corporate financial services; Edward T. Lenahan, opera tions and management; and Eldon W. Bergstrom Jr., trust and investment. Sandra Kay Crawford, Kevin J. Hallagan and Francis E. Shine III have been elected vice presidents and asso ciate corporate counsels. Kentucky ■ JOHN KEM NER has been named region general manager for Mosler’s enlarged Mid-Atlantic sales region. Mosler is headquartered in Hamilton, O. Mr. Kemner will have headquarters in Columbia, Aid., and will be responsi ble for sales, installation and service of Mosler automatic bank tellers and other Indiana ■ CMI IN VESTM EN T CORP., Madi son, Wis., has named David G. Richey and Randolph C. Nail Jr. as district sales directors in Indiana. Mr. Richey will cover Indianapolis and central In diana. He previously was with Mercan tile Mortgage Corp., Indianapolis. Mr. Nail, who will cover northern Indiana, formerly was a mortgage loan officer with Hamilton Mortgage Corp., At lanta. N AIL RICHEY ■ CITIZENS BANK, Jeffersonville, has promoted the following to assistant vice presidents: Richard E. Alexander, Howard A. Brewster III, Carol] D. Cox, Mary I. Haehl, Jo Hammond and Charles R. Meyer. ■ JAM ES A. BUNNING has been appointed manager of the Hebron Of fice of Northern Indiana Bank, Val paraiso. He formerly was personnel offi cer, First State of Cobb County, Smyrna, Ga. ■ W E N D E LL H. BROWN has joined Fowler State as assistant cashier, while Linda I. Brewer has been elevated to auditor. She joined the bank in 1968. ■ WALLACE J. FOSN IGHT has been named assistant vice president marketing at Peoples Trust, Fort Wayne, while Fred S. Mertz has been elected purchasing officer and Larry D. Riley has been elevated to assistant trust officer. KEMNER DYER security and transaction equipment in an area including Kentucky. He will be assisted by James Dyer, who has been apointed region sales manager. Mr. Kemner has been with Mosler 23 years and formerly was region manager of the company’s previous Mid-Atlantic sales area. ■ R O BERT L. EPLIN G has been elected president, Central Bank, Lex ington. Prior to his appointment, Mr. Epling had been president, Dania (F la.) Bank, and before that headed the Marathon (Fla.) Bank. ■ STEPH EN D. HALE has been ele vated to assistant cashier and manager of the Clay City Branch of Powell County Bank, Stanton. He joined the bank in 1973 and has worked in several departments. ■ CHARLES O. PASLEY has been named vice pi'esident, National Bank, Paris, and will have responsibility in the consumer-loan area. He goes there from First National, Georgetown. ■ BEN L. LYKINS has been elected executive vice president and a director of First Farmers Bank, Owenton. He joined the bank in 1972 and has served on its executive and loan committees. ■ JASPER M. PEARSON has been promoted to cashier, Waco Deposit Bank. He has been with the bank since 1974. KBA Convention Set L O U ISV ILLE— The Galt House here will host the 82nd annual con vention of the Kentucky Bankers Association September 12-14. 128 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ■ BRU CE W EBB has joined Corbin Deposit Bank as cashier, while Willadean Chandler has been named auditor. James E. Rogers has been appointed assistant vice president, and Larry Rogers and Terry Roark have been named assistant cashiers. ■ B ILLY C. HOUSE has been elected assistant vice president, First National, Carlisle. He joined the bank in 1973 and is responsible for commercial-loan administration. ■ BEN F. BROW N has been elected president and Brien E. Risk has been named chairman, F i r s t National, Nicholasville. Also promoted were Michael Marks, from cashier to vice president and cashier; J. Frank Hall, from assistant vice president to vice president; J. Samuel Sternberg, from assistant cashier to assistant vice presi dent; and James Bailey, to assistant cashier. ■ SEVERAL PROMOTIONS have been announced at Citizens Fidelity Bank, Louisville: William T. Simpson, vice president and financial planning manager, to senior vice president and investment management manager; W. Robert Tennill, vice president, account ing, to senior vice president, account ing and finance; and E. Fredrick Zopp, vice president and general counsel, to senior vice president and general coun sel. F. Gerald Greenwell, assistant trust officer, financial planning, has been advanced to trust officer; Allen J. Duffin, administrative assistant, security, to operations officer; and Ken Forsthoefel, credit and collection manager, BankAmericard, to assistant cashier. James Thompson, chairman and CEO, Glenmore Distilleries Co., Louisville, has been elected a bank director. M ississippi a JAM ES T. M ITC H ELL has been appointed president, Bank of Meridian, and executive vice president, adminis tration, Quitman Banking System. He also was named to the bank’s board and its executive and investment com mittees. Mr. Mitchell goes there from Peoples Bank of Mississippi, Union, where he served as president of its Meridian Branch. a DAVID W. W E ST has joined Southern National, Hattiesburg, as trust officer. He formerly was with A. A. Harmon & Co. CPA firm, New Orleans, where he had been supervisor of the tax department. B THOMAS H. VAUGHAN has been elected executive vice president, First MID-CONTINENT BANKER for April, 1 9 7 6 Looking For Answers? BAI Has Them. At conventions, conferences, seminars, workshops, think sessions, and courses. Coordinated by a professional staff with practical experience in every aspect of bank administration. Providing the most effective tools, techniques and problem-solving ideas to help you cope with today’s ever-changing banking environment. So plan now to attend a BAI convention in 1976. You 11 be able to discuss your hanking needs with people in the know— bankers, educators, consultants— authorities in the financial community who will add new dimensions to your banking professionalism. alisi ¡if ■ i wm Be sure to attend one or more of the following major meetings in 1976: April 4-6 Eastern Regional Convention Norfolk, Virginia June 6-8 Western Regional Convention Salt Lake City, Utah February 1-5 ERISA Conference Chicago, Illinois April 20-22 Conference on Bank Holding Company Administration St. Louis, Missouri August 1-8 The Graduate Program in Bank Administration Madison, Wisconsin March 7-10 Exception Item Conference Chicago, Illinois May 2-4 Northern Regional Convention Chicago, Illinois August 1-13 School for Bank Administration Madison, Wisconsin March 21-24 EDP Audit Conference Kansas City, Missouri May 16-18 Southern Regional Convention Oklahoma City, Oklahoma October 17-20 52nd National Convention Philadelphia, Pennsylvania January 25-27 Seventh National Conference on Bank Security New Orleans, Louisiana Q DANK ADMINISTRATION INSTITUTE 303 South Northwest Highway MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Park Ridge, Illinois 60068 312-775-5344 129 National of Holmes County, Pickins. He will continue as manager of the bank’s Pickens Branch. ■ RAYMOND R. ROBINSON has been named president, First Citizens Bank, Poplarville. Prior to his appoint ment, Mr. Robinson had been with a bank in Jackson for 14 years and had spent the past five years as executive vice president, Bay Springs Bank. ■ THOMAS H. CARROLL JR. has been elected president, Bank of Mis sissippi, Grenada, succeeding Henry J. Ray Jr., who has assumed duties as the bank’s administrative consultant. Mr. Carroll’s banking career began with Grenada Trust in 1962. He was named vice president when the bank merged with Bank of Mississippi in 1974. Missouri ■ FRANK L. VICTOR has been ele vated from executive vice president to vice chairman at Grand Avenue Bank, Kansas City, while Barbara Pendleton, vice president and secretary since 1962, has been named executive vice presi dent. Mr. Victor joined the bank in 1962 and heads the business develop ment department. Miss Pendleton is a former national president, National As sociation of Bank-Women Inc. Continu ing as president and CEO of the bank is Lyle Wells Jr. VICTOR PENDLETON ■ R. MARION LUCAS has been pro moted from cashier to vice president at First National Mercantile Bank, Mont gomery City. Succeeding Mr. Lucas as cashier is Thomas J. Niedergerke, for merly assistant cashier, while Marcus A. Deeker has been named assistant cash ier. In addition, Flavius P. Wyatt has been named a director. He is a local businessman. ■ COM M ERCIAL BANK, Liberty, has announced the following promo tions: Plelen K. Duncan and John H. Ferguson, from assistant vice presi dents to vice presidents. Dale A. Gries130 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis sel, formerly senior vice president and cashier, Guaranty National, Tulsa, has joined the bank as vice president, while Henry Mancini, a local business man, has been elected a director. ■ I HE F E D has approved the merger of Ameribanc, Inc., St. Joseph, and First American Bancshares, Inc. The latter HC’s affiliate banks, which will join Ameribanc, are First American Bank, Skidmore; First National, Plattsburg; First American Bank, Union Star; First National, Stewartsville; and Bank of Edgerton. The merger brings to 12 the number of banks affiliated with the St. Joseph HC. ■ TH E F E D has approved the affilia tion of Bank of Ladue and First Na tional Charter Corp., Kansas City. ■ COM M ERCE BANK, Kansas City, has announced several promotions: Theodore D. Lyons, to vice president, central securities department, which he manages; Eugene L. Mahaffey, to vice president, BankAmericard, where he is assistant center manager; James L. Peters, to vice president, bond de partment, where he serves as money market and U. S. Treasury and federal agency securities manager; and John J. Williams, to vice president, national division, commercial loan department. James R. Trigg has been named assist ant vice president, national accounts division. ■ WAYNE D. M USKOPF, personnel manager, First National in St. Louis, has been promoted to vice president, while G. Jeffrey Jones has been ele vated to assistant vice president. Mil dred B. Yahl has been named a per-, sonal banking officer and John Britton has been appointed a business develop ment officer. In addition, Robert C. West, president and CEO, Sverdrup & Parcel & Associates, Inc., St. Louis, has been elected a director of the bank. ■ CENTRAL TRU ST, Jefferson City, has named two senior vice presidents: James T. Herfurth, operations, and Al bert T. Able, data processing. Neil T. Baker has been promoted to vice presi dent and manager, Central Data Co., BOOS BOWMAN while Richard T. Schutt has been ele vated to second vice president. * VALLEY BANK of Florissant has changed its name to Commerce Bank of Florissant, reflecting its affiliation with Commerce Bancshares, Inc., Kansas City. ■ ROGER L. GARRISON, vice presi dent and trust officer, Commerce Bank of Springfield, has been promoted to senior vice president-trust. William T. White, assistant vice president-commer cial loans, has been elevated to vice president-commercial loans; Harold W. Bouldin, assistant vice president-install ment loans, to vice president-install ment loans; Mary Ann Horton and Larry A. Wilkerson, installment loan officers, to assistant vice presidents-installment loans; Frank W. Hilton, com mercial loan officer, to assistant vice president-commercial loans; and Bar bara L. Bates, to real estate loan of ficer. ■ PLAZA F IR S T NATIONAL of West Port, St. Louis County, has elected William A. Donze Jr. and Gary B. O’Neal vice presidents. Mr. Donze re tains his titles of controller and director of data processing, while Mr. O’Neal manages commercial lending. ■ THOMAS KINSEY, formerly senior vice president and cashier, Bank of Kennett, has been elected to the newly created position of executive vice presi dent, chief operating officer and di rector, Citizens Bank, Pacific. The two banks are affiliates of First Union, Inc., St. Louis. Mr. Kinsey joined Bank of Kennett in 1950. * EDW ARD J. BOOS has been pro moted to assistant vice president in the agriculture-correspondent banking de partment, First National, St. Joseph. He joined the bank in 1973 as a repre sentative in that department. ■ CHARLES A. BOWMAN has been advanced to senior vice president and operations officer, United Missouri Bank of Kansas City, while John C. House and Fritz R. Krolimer have been named vice presidents. Jon J. Henderson has been elevated to assistant vice presi- HOUSE KROHMER MID-CONTINENT BANKER for April. 1976 dent. Mr. Bowman joined the bank in 1959; Mr. House, in 1973; Mr. Kroti mer formerly was with the Kansas City Fed; and Mr. Henderson joined UMB in 1970. New Mexico ■ F ID E L IT Y NATIONAL, Albuquerque, has become an affiliate of New Mexico Bancorp., Inc., Santa Fe. In the move, Jack Daniels, Fidelity National executive committee chairman, and Bob Tinley, bank president and CEO, have been named to the New Mexico Ban corp. board. credit and loan review manager; and Gary Pullen vice president and auditor. Mr. Skaistis previously was with Arthur Andersen & Co., where he was a con sultant for the data processing opera tions of Bank of Oklahoma. Mr. Madi gan formerly was senior vice president and credit policy chairman with an Oklahoma City bank HC, and Mr. Pul len goes to Bank of Oklahoma from First National, Dallas. ■ RAYMOND E. M ILTZ has been appointed regional banking section manager at First National, Tulsa. A vice president, he joined the bank in 1974 and formerly was a livestock con sultant and appraiser. ■ F IR S T NATIONAL, Albuquerque, has announced the promotions of Jo Anne Jones and Janetta Sharp to assist ant vice presidents, real estate depart ment. Mrs. Jones joined the bank in 1958, while Mrs. Sharp joined First Na tional in 1963. ■ F IR S T NATIONAL, Los Alamos, has held a display of four bronzes by Frederic Remington to celebrate the opening of its new office at Trinity and 20th. The office features three pneu matic drive-up lanes. Titles of the bronzes shown are “Rattlesnake,” “Cheyenne,” “The Bronco Buster” and “Rough Rider Sergeant.” In addition, a daily drawing for $100 was held the first two weeks of the office’s operation. ■ JOHN R. THOMAS has retired as regional administrator of national banks, Denver, and has been succeeded by Kent D. Glover. Mr. Thomas has been with the Comptroller’s office 30 years and had been 12th Region administra tor since 1962. That region covers New Mexico, Arizona, Colorado, Utah and Wyoming. Mr. Glover, who has been with the Comptroller’s office since 1951, had served as deputy regional adminis trator in San Francisco since 1964. Oklahoma ■ BANK O F OKLAHOMA, Tulsa, has named Bruce Skaistis vice president and information services manager; Har old J. Madigan vice president and SKAISTIS PULLEN TÏÏ 1 BANKERS A Sensible Risk Management Program In One Step- By-Step Practical Desk Top Reference Guide. Now every commercial banker can understand, plan and monitor a sensible program of Risk Management. This new, concise manual helps you measure all the loss exposures you face...shows how to reduce needless and costly insurance gaps or overlaps...aids you in establishing a full-dimensional risk manage ment program, including loss funding, to conserve your bank assets and get more for your insurance and protection dollar. ■ R O BER T C. VanLAANEN has been elected vice president in charge of commercial loans at Stock Yards Bank, Oklahoma City. Prior to joining Stock Yards Bank last February, Mr. VanLaanen was vice president, commercial loans, First National, Oklahoma City. ■ EU G EN E DEAN has been ad vanced from vice president to senior vice president at City National, Lawton, while Robert Joe Nall, formerly cash ier, has been named vice president. Zelda Davis has been elected vice presi dent; Pauline Roper has been elevated from assistant cashier to cashier, and Steve Barnes, to assistant vice presi dent. Named assistant cashiers were Gene Norman and Bob Burroughs. ■ B IL L RICHARDSON, who owns controlling interest in First National of Britton and Grant Square Bank, both of Oklahoma City, and in Plaza Na tional, Bartlesville, has bought con trolling interest in Capitol Hill State, Oklahoma City. He has been named chairman, succeeding J. B. Seligson, who remains a director. Wayne Lawler continues as bank president. J. L. Thompson has been named a director, while A. T. F. Seale and Charles R. Stuart have left the board. ■ W. E. HARVEY, formerly executive vice president, First Bank, Sand Springs, has been named president, following the resignation of Louis R. Hughes for health reasons. Succeeding Mr. Harvey as executive vice president is Clark Walton, while Gary Spencer has been elevated to vice president. MID-CONTINENT BANKER for April, 197 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Presenting This unique manual - (which is by the same publisher o f the Risk and Insurance Manage ment Guide For Savings Institutions) - takes you step-by-step through every area of Risk Management planning - in simple terms, with specific examples. You needn't be an insur ance agent to understand it. Yet every section reveals new, proven ways to reduce your risks, losses and problems and is constantly kept up to date. THE RISK AND INSURANCE MANAGEMENT GUIDE •Complete Loose-Leaf, Tab-Divided, Section Indexed •Ten issues of “ Risk Management News" •Guide Updates For The First Year $ioo.°° HOW YOUR GUIDE STAYS UP-TO-DATE You will be automatically billed $50.00 annually for continuing service beyond the first year to keep your guide current. 10-DAY TRIAL OFFER Take 10 days to examine this vital manual at your leisure. If you are not satisfied, simply return the guide at no cost or obligation. _ ** qp M id -C o n tin en t Banker 408 Olive St. St. Louis, Mo. 63102 Please send me The Risk and Insurance Management Guide for Bankers. The $100.00 initial price includes the first ten issues of ''Risk Management News" plus all revisions and additions to the Guide. I understand if I am not completely satisfied I may return the Guide within ten days and my money will be refunded. Please include appropriate sales tax. □ Check enclosed, please ship postage paid. □ Bill me and add $2.50 to cover postage and handling. | □ Please send me further information. Name..................................................................... Title....................................................................... Institution............................................................ Street..................................................................... City............................... State.......................Zip.. 131 ■ COLIN M. HENDERSON has been elected vice president and trust opera tions officer, Fourth National, Tulsa. Mr. Henderson began his banking ca reer with National Bank of Commerce, Dallas, and later served as trust officer with another bank in Tulsa. vice president and trust officer. Donald L. Lockmiller has been named an as sistant vice president. Mr. Bryan joined the bank in 1966; Mr. Dickerson, in 1972; and Mr. Lockmiller, in 1974. ■ DAVID V. EDMONDSON has been promoted to vice president, retail di vision, American National, Chattanooga. He will serve as assistant to the retail division head and will have responsibil ity for the Master Charge/EFTS, re tail adjustment, retail marketing and business development departments. ■ JAM ES W. BRUCE JR. has been named senior vice president, Liberty National, Oklahoma City. Also named in promotions were Jean R. Johnson, to vice president and senior investment officer; Charles B. Johnson, to vice president and investment officer; J. David Jensen, to vice president; Rob ert P. Goodwin, to assistant vice presi dent and investment officer; Rodney L. Lee, to assistant vice president and as sistant controller: and J. Terry Cook and Paul J. Kelly, to assistant vice presidents. ■ F IR S T NATIONAL, Bartlesville, has promoted the following to senior vice presidents: Robert W. Butler, Barry M. Hudson and Bruce E. Oakley. Neal T. Seidle has been named senior vice president and senior trust officer, while Paul D. Brown has joined the bank as vice president. Mr. Brown will work with area farmers and ranchers and will maintain contact with First National’s correspondent banks. Mr. Butler joined the bank in 1952; Messrs. Hudson and Seidle, in 1964; Mr. Oak ley, in 1960; and Mr. Brown formerly was with John Hancock Life as Okla homa senior field representative, agri cultural investment department. Tennessee Young Bankers Schedule Annual Convention For Nashville, April 13-14 NASHVILLE—The Hyatt-Regency has been slated as headquarters for the Tennessee Young Bankers Division con vention April 13-14. An impressive list of guest speakers will be on hand for the business ses sions during the two-day event: T. Scott Fillebrown Jr., vice chairman, First American National, and president of its HC, First Amtenn Corp., both of Nashville; Harry B. Brock Jr., CEO, Central Bank, Birmingham; Winfield Dunn, former Tennessee governor; Joe Hemphill, state commissioner of bank ing; and John Merritt, head football coach, Tennessee State University, Nashville. Entertainment for the convention 132 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Manufactured Housing (Continued from page 22) HOLLAND will include golf and tennis tourna ments, while entertainers slated for the first of two evenings’ receptions are Grand Ole Opry Stars George Grove and Larry Moore. Russ and Becky Jeffers will entertain at the other re ception. Sandi Burnett and her band, Chops, will play for the annual dance. For the spouses, a tour of Music City U. S. A. is planned. It will be followed by a makeup demonstration by Norma Gerson. Robert Williams, cashier, First Na tional, Savannah, is president of the Tennessee Young Bankers. President elect is Lee Beeman, president, Liberty Bank of Tennessee, Athens. Tom Hol land Jr., vice president and cashier, Union National, Fayetteville, is the division’s vice president. ■ F IR S T NATIONAL, Memphis, has named George Lewis and James M. Crews Jr. as executive vice presidents. Joe H. Davis Jr. has been appointed vice president and metropolitan divi sion manager, succeeding John P. Dulin, who has been elected president, First Tennessee National, Chattanooga. Thomas J. Rutter replaces Mr. Davis as regional branch manager. ■ CHARLES J. BRYAN has been ele vated from assistant vice president to vice president at Third National, Nash ville, while William Richard Dickerson has been advanced from trust officer to to “sweat it out” should be beneficial to the manufactured-housing industry. The industry has been concerned with three types of insurance: credit bond, physical damage (including vendors single interest) and credit life and accident-and-health. Credit insurance has about run its course. It indemnifies lenders against losses on repossessions. There have been many abuses of it by all partici pants, resulting in gigantic losses for insurers. Insurers still in the business are providing limited protection to lenders, dealers and service companies, and require the participants to assume a reasonable share of the risk and the losses. That will be the type of credit insurance henceforth offered to the in dustry: no longer will it be possible for a dealer, lender or a service company to pass the total risk over to an insur ance company. This healthy situation bears out the fact that no segment of the manufactured housing industry stands alone; each depends on the others. Physical-damage insurance has played an important part in industry develop ment. Insurance companies have per formed magnificently, providing cus tomer protection despite the poor qual ity of some homes and the high inci dence of loss by fire and windstorm. To provide protection for dealers and lenders, vendors-single-interest protec tion was developed, in which dealers and lenders assume the risk of purchas er conversion of the home, its furniture, appliances and equipment. It has been abused badly. Some carriers have ceased writing coverage for the industry. Others have, changed their programs to suit changed conditions, in some instances reducing the term of their policies and restrict ing the territories in which they do business. Perhaps it’s with that in creased quality and better cooperation from all segments of the business that insurance experience will improve, thus MID-CONTINENT BANKER for April, 1976 Lee Daniel, a banker’s banker. Correspondent Bankers For a knowledgeable, direct connection to our Corporate S ervices — including Cash M anagem ent—get connected with Lee Daniel. His prior experience in heavy industry has added a valuable facet to his personal financial know-how. Take advantage of it. Let Lee Daniel fit your financial needs into our ca pa b ilitie s—fast. ( 918 ) 584-3411 Marvin Bray Bill Hellen Charles M cNam ara Charles Rice D epartm ent Manager BANK OF OKLAHOMA P.O. Box 2300 / Tulsa, Oklahoma 74192 MID-CONTINENT BANKER for April, 1976 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 133 making the industry more attractive to more insurers. Credit life and accident-and-health insurance, available for many years, has been a source of income for dealers, lenders and service companies. A deter rent factor has been that premiums for coverage, loaded into the finance charge, increase the customer’s monthly payments rather substantially, adding to sales resistance. It’s valuable protec tion for buyer and family but has no affect on the manufactured-housing industry’s welfare. * * M ason Succeeds Fischer As Executive Vice Pres., C onsum er Bankers Assn. WASHINGTON, D. C.—Thomas P. Mason Jr. has been named to succeed the retiring Robert A. Fischer as execu tive vice president of the Consumer Bankers Association. The CBA represents the interests of the installment lending operations of many of the nation’s commercial banks. In his new position, Mr. Mason, who previously was director of public affairs for the National Consumer Finance As sociation and director of public infor mation for the American Bankers As sociation, will have responsibility for overall supervision of the CBA’s activi ties in development of methods of con sumer banking administration, commu nications and legislative relations. He also will serve as director of the CBA’s Graduate School of Consumer Banking. Mr. Fischer had been the associa tion’s executive vice president for the past 18 years and had been in the con sumer credit industry 43 years. Prior to assuming the CBA post in 1958, he was in charge of the consumer loan department at Hoosier State, Ham mond, Ind. Home-Improvement-Loan Rebates Are Offered to Bank Depositors Customers of United Missouri Bank, Ferguson, who qualify for a homeimprovement loan, receive a $50 rebate in the form of an interest and payment reduction. To qualify, one must be a depositor of the bank and must qualify for a loan: $1,000 minimum, $5,000 maxi mum. The rebate program will end June 30. 134 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Disclosure Dilemma (Continued from page 12) view has been undergoing a great deal of réévaluation. What once was con sidered “material” now might be con sidered quite differently and what was “immaterial” a few years ago, today, under the SE C ’s interpretations, is likely to be considered material. This is especially true in subjective areas where there may be some moral judg ments. In other words, there’s a grow ing voice saying an unethical or illegal act—even though of very small financial consequences— does trigger the concept of materiality, indicating a basic flaw in the character of the organization. Using the perceptions of full, fair, adequate and honest reporting of ma terial events, one actually is plowing new ground, as well as raising the ques tion of the form of the company’s code and its impact on the precise behavior of the institution. This raises tremendous questions about the manner in which these can be presented, especially in light of to day’s widely expanded qualitative con cept of materiality. * * Index to Advertisers • Alamo Bank of T e x a s ....................................... 134 American Bank of Commerce, El Paso 102 American Express Co. (Travelers Cheques) 26-27 Amiel Industries .............................................. 20 Astor Tower Hotel ............................................ 127 Automation Forms Co., Inc........................... 48 Bank Administration Institute ............. 129 Bank Board Letter ................................... 124-125 Bank Building Corp............................................ 15 Bank of America .............................................. 6 Bank of Oklahoma .......................................... 133 Bank of the Southwest, Houston ............... 73 Bavis & Associates, E. F.................................. 47 Boatmen’s National Bank ............................... 69 Central Trust Co. 28 Chase Manhattan Bank ................................. 7 Cheshire Inn & Lodge ..................................... 38 Citicorp Services, Inc. (Travelers Checks) 70-71 City National Bank, Baton Rouge ............... 99 Commerce Bank, Kansas City 86 Commercial Nat'l Bank, Kansas City, Kan. 115 De Luxe Check Printers, Inc......................... 54 Detroit Bank & Trust Co.................................. 89 Diebold, Inc. ...................................................... 53 Doane Agricultural Service, Inc................... 62 Downey Co., C. L.............................................. 63 Fabcraft, Inc........................................................ 25 Farmers Grain & Livestock Hedging Corp. . 14 Federated Securities Corp............................... 89 Financial Industry Systems ........................... 45 First Alabama Bancshares ..................... 44 First American Nat’l Bank, Nashville ........ 83 First City National Bank, El Paso ............... 109 First City National Bank, Houston ............. 105 First National Bank, Amarillo ..................... 100 First National Bank, C h ic a g o ....................... 4-5 First National Bank, Hutchinson, Kan......... 112 First National Bank, Kansas City ............... 81 First National Bank, Louisville ................. 61 First National Bank, St. Louis ................... 136 First National Bank, Wichita ....................... 117 First Nat’l Bank & Tr. Co., Alton ............... 93 First N at’l Bank of Commerce, New Orleans .................................................. 3 First Oklahoma Bancorp............................... 10-11 First Security National Bank ....................... 49 Fourth National Bank, Tulsa ....................... 37 Fourth Nat'l Bank, Wichita ......................... 43 Frost National Bank ....................................... 103 Harland Co., John H.......................................... 59 Harrow Smith Co................................................ 126 Hattier, Sanford & R e y n o ir............................. 96 Hotel Taft.......................................................... 127 Howard, Weil, Labouisse, Friedrichs & Co. 96 Hutchinson Nat’l Bank ................................... 120 Industrial Life Insurance Co......................... 102 Insurance Enterprises, Inc............................... 60 Insured Credit Services, Inc............................ 75 Integon Corp........................................................ 23 International Silver Co..................................... 77 Kansas Bank Note .......................................... 65 Liberty Nat’l Bank, Oklahoma City .............. 2 Lubbock National Bank ................................. 106 MGIC Indemnity Corp................................... 78-79 Meilink Bank Equipment ............................... 80 8 Mercantile Bank, St. Louis ........................... NCR Corp.............................................................. 41 National Boulevard Bank ............................... 57 National Stock Yards National Bank .......... 135 Northern Trust Co............................................ 67 Palumbo & Co., Inc., George ....................... 40 Payment Systems Newsletter ..................... 39 Polk & Co., R. L.......................... 85 Prescott, Wright, Snider Co............................ 121 Rand McNally & Co.......................................... 56 Risk Insurance Management Guide ........... 131 St. Mary Bank & Trust Co.............................. 97 Security Corp....................................................... 19 Security National Bank ................................. 119 Security State Bank ....................................... 122 Springfield Marine Bank ............................. 90 Standard Life Insurance Co........................... 17 State National B a n k ......................................... I l l Stifel, Nicolaus & Co., Inc............................... 123 Texas Bank & Trust Co.................................... 107 Union Bank & Trust ....................................... 88 Union National Bank ..................................... 92 United Missouri Bank, Kansas City ............ 13 Whitney National Bank ................................... 94 Worthen Bank & Trust Co............................... 51 Zahner & Co........................................................ 84 RETIRED OPERATIONS MAN WANTED If you are a recently-retired, or aboutto-retire, cashier or operations man, would you like to live in the Magic Rio Grande Valley? Our 18 million dollar bank is located near McAllen, Texas, in the heart of the country’s most enjoyable, sub-tropic, tourist and retirement area. We are rich in diversified agriculture as well, which helps to make us one of the fastest grow ing banks in the Valley. We need a mature, experienced banker who enjoys meeting the public, participat ing in civic affairs, and who has the necessary personnel skills to supervise the Bank’s operating departments. Thorough knowledge of EDP and the note department is essential. Our bank is clean and well managed, and 100% locally owned. If you are a banker who has too much enthusiasm and energy to just quit, drop me a line and send a resume: John H. Northcutt, President Alamo Bank of Texas P.O. Box 546 Alamo, Texas 78516 or call 512-787-4261. FOR SALE OR LEASE BRANCH BANK 12' x 60' Bank • 3 Tellers Privafe Office • Carpeting Electric Heat • Central A ir Available immediately. Call Col lect: 517-631-2076 or write: Stan Bobit, P.O. Box 2164, Midland, Ml 48640. SALES PROFESSIONAL Commissions, upper five figures. Must be “Pro” with successful record that can be verified. Send resume to Midcontinent Energy & Financial, Inc., 1515 N. Warson Rd., St. Louis, Mo. 63132. Then call for interview, (314) 423-4644. MID-CONTINENT BANKER for April, 1976 even on fundays Although Ray Madorin relaxes on the links during those respites from work-week pressures, he lets no grass grow under his feet when It comes to consideration of your correspondent matters, He swings and pitches and putts and ponders ,,, and that's when his subconscious works best on matters that are strictly business, Thus Ray does his share in keeping S.Y.B. the nation's No, 1 Bankers' Bank ,,, even on Fundays. But on decision-making days, it's par-for-the-course for him to swing into your particular correspondent problems, You can reach him in just ten holes — 618-271-6633, "YOUR BANKERS BANK", 7 J u s t a cro s s the r iv e r fro m S t Louis THE NATIONAL STOCK YARDS NATIONAL BANK NUB I OF N A T IO N A L CITY NATIONAL STOCK YARDS. ILLINOIS 62071 Member Federal D^pos«! Insurance Co https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Work with a banker who knows what his bank can do for you. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis At First National Bank in St. Louis, our corre spondent bankers are trained in what our bank can do for you. Across the board. Department by department. The result is men with solid experience and individual authority. So they can make fast decisions for you on their own. T h ey’re backed by a bank with strong, steady growth. And total banking capabilities including overline loans, bond department services, computer ized check collection, cash management systems. Plus our annual correspondent seminars where you can exchange ideas and learn about new profit opportunities. Get to know your First National correspondent banker. He knows his bank. He’d like to put us to work for you. First National Bank in St.Louis Wfc Member FDIC i H I