Full text of The Northwestern Banker : March 11, 1968, No. 1086

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No. 1086

Des Moines, Iowa

ABA and Patman Clash on Student Loans

4¡~

The American Bankers A sso
ciation is urging Congress to
approve five proposed changes
in the private guaranteed stu
dent loan program. Three of the
amendments were recommended
by the Administration as a
means of strengthening the pro
gram.
Testifying for the A ssociation before the Special Sub
committee on Education of the
House Education and Labor
Committee, Executive Vice Pres
ident Charls E. Walker reviewed
the program’ s outstanding per
formance record during the first
18 months of activity, in which
685,000 loans with an aggregate
dollar value of $558 million
have been extended by private
lenders. He stated that “ if the
program is improved so as to
make it fully sustainable, it has
immense potential to make a
most significant contribution
to our nation’ s student financial
needs,” but warned that “ un
less the necessary improve
ments are made, we are not
optimistic about the program’ s
future.”
One of the most serious
defects in the program, accord

ing to Dr. Walker, “ is that lend
ing institutions are suffering
out-of-pocket losses in extend
ing loans at the permissible
6% simple interest rate. Noting
that lenders should be permit
ted to “ break even in the ex
tension of these student loans,”
he urged adoption of the system
of placement and conversion
fees recommended by the Ad
ministration.
Dr. Walker pointed out that
the Higher Education Act of
1965 authorizes the increase
in the permissible interest rate
on Federally-insured loans to
7% per annum where the higher
return to the lender is required
for the successful operation of
the program. He then offered
interest-rate computations which
showed that the inclusion of
the maximum proposed fees of
$35 would seldom if ever ex
ceed the 7% yield. “ T hu s,” he
said, “ if the Congress approved
the fee system recommended by
the Administration, it would be
merely reaffirming the policy
enunciated in the 1965 Act with
respect to the matter of return
to lenders under the Guaranteed
Student Loan Program.”

March 11,1968
Wright Patman, chairman of
the House Banking Committee,
is opposed to “ drastic changes”
in the student loan program.
He refers to Dr. Walker as “ the
hired scrooge of the American
Bankers Association” and he
blames Joseph Barr, Under Sec
retary of the Treasury, and Dr.
Walker for the “ bankers’ bo
nanza provision” in the bill.
Dr. Walker reminded the leg
islators that banks and other
lenders were giving up much
more profitable lending oppor
tunities to take an active part
in the student loan program.
One reason banks have stayed
in the program is because ABA
leaders expressed confidence
that the fee proposal was rea
sonable, had strong Adminis
tration
support,
and would
probably pass the Congress,
retroactive to June 1, 1967.
Repr. Patman contends that
Dr. Walker had no basis for
saying the fee proposal would
be retroactive to June 1, 1967.
He says that “ Mr. Barr is lead
ing the effort to get Dr. Walker
off the limb before it is sawed
out from under him.”
The ABA official also sup
ported Administration proposals
(Continued on Page 4)

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IOWA-DES MOINES
NATIONAL BAN K
George Harnagel

M em ber F e d e r a l D e p o s i t In su r a n c e C o r p o r a tio n

Supreme Court Reaffirms
Bank Merger Act of 1966

ers A ssociation, will be the fea
tured speaker.

WASHINGTON-The United States
Supreme Court by a 5—2 vote, has
sent the antitrust suit against the
Third National Bank, Nashville,
Tenn., back to a lower court with
instructions to apply more strict
standards under the Bank Merger
A ct of 1966.
All seven ju stices participating
in the case agreed that the Aug
ust, 1964 merger by Third National
of the $45.8 m illion-deposit Nash
v ille Bank and Trust C o. violated
the Clayton Antitrust Act. In so
doing, they reaffirmed the 1963
decision against Philadelphia Na
tional Bank which led Congress to
rewrite the bank merger statute.

CENTERVILLE: Controlling inter
est in the Centerville Natl. Bank
has been sold by W. K. Ervin to a
group of directors of the bank, e f
fective last Thursday. They are:
Robert K. B eck, Vem T. Mot't,
Chester C. Carmer, H. B. Craver,
Robert S. Malmberg, James G. Milani, Everett Wehrle and R. W.
Greenleaf.
Mr. Beck has been elected chmn.
of the board, and Mr. Malmberg
has been elected pres. No other
changes in personnel have been
announced. Mr. Ervin will serve
as an advisory director. All pur
chasers are local residents.
The bank at year-end had de
posits of $10,870,323 and loans
of $5,339,963. Capital is $150,000;
surplus, $350,000, and undivided
profits and reserves, $493,158.

IOWA NEWS
CEDAR RAPIDS: The annual spring
meeting of the Linn County Bank
ers A ssociation will be held at the
Town House Motor Inn on Thurs
day, March 14, starting at 5:30p.m.
Adjoining counties have been in
vited to join the Linn County group.
Stan Barber, pres., Wellman Sav.
Bank and pres., Independent Bank

CHRISTY
ARMSTRONG

LEO
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9TH AND MAIN, DUBUQUE, IOWA
MEMBER: FOIC • FRS

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SCHLUETER
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JAMES
W R IG HT

COUNCIL BLUFFS: After 42 years
with the First Natl. Bank, Robert
W. Turner resigned from the board.
He headed the bank from 1926
to 1961. He will continue as chair
man of the advisory board. He
joined the bank in 1919 as a
messenger.
DES MOINES: Funeral services
were held last week for J. Roy
Capps, who retired as v.p. of Cen
tral Natl. Bank & Trust C o., in
August, 1958. He died in A sheville,
N. C. where he had resided since
retirement.

DES MOINES: The Iowa executive
council has asked for an opinion
from the attorney general as to
whether or not they have juris
diction on a hearing requested by
Humeston businessmen and the Corydon State Bank on the banking
board’ s approval to consolidate the
banks at L ineville, Allerton and
Humeston and move them to Corydon.
DUBUQUE: The First Natl. Bank
has filed an application with the
Comptroller of the Currency for
permission to establish a parking
lot facility at John F. Kennedy
Road and Wacker Dr. in Dubuque.
HUMBOLDT: Donald W. Christen
sen has been promoted by the First
Natl. Bank to a .c. and bank a c
countant. He was previously note
teller.
KNOXVILLE: Thomas L. Tucker,
who has been with a local real
estate and insurance firm, has
joined the Iowa State Sav. Bank.
LaPORTE CITY: William Cray of
Waterloo has joined the LaPorte
City State Bank as v.p. He former
ly was associated with the Ex
change State Bank, Lime Springs,
and for the past few years he has
owned and operated a real estate
firm in Waterloo. Arden E. Melchef,
who has been with the bank 22
years, has been the ex ec. off.
since the resignation of Dale Auld
last fall. Mr. Auld is now residing
in Sedona, Ariz.

NEBRASKA NEWS
AURORA: The First Natl. Bank re
cently observed its 34th anniver
sary.
BEATRICE: W. E. Smith has re
signed as mgr. of the thrifty loan
dept, of the Beatrice Natl. Bank.
GRETNA: Marvin K illion, formerly

LINCOLN

...F irst in Transit Service

FIRST NATIONAL BANK & TRUST COMPANY OF LINCOLN
12th & N Street • LINCOLN, NEBRASKA • Member: F.D.I.C.

•4
7

v.p. & cash, at the Gretna State
Bank, has been elected bank pres.
Ronald H. Suhr has been promoted
from a .c .t o v.p. & cash. The bank’ s
capital accounts have been in
creased from $50,000 to $100,000
by a transfer from surplus.
HASTINGS: E. James Haggart has
been elected a .c. at the City Natl.
Bank. He also will continue as
ag rep.
HASTINGS: Articles of incorpora
tion have been filed for the West
Gate Bank, with proposed location
in Westgate Shopping Center. Con
struction of the new bank building
will begin within the month. Listed
as incorporators are S. Edward
Copple and Charles Pallesen, Jr.,
both of Lincoln.
OGALLALA: The Nebraska group
of the National Association of Bank
Women will hold its annual state
meeting here April 25—27.
OMAHA: Michael H. A llely, Charles
R. Johnson and Donald J. Kleffner
have been advanced to data pro
cessing officers at the Omaha
Natl. Bank. Jasper Bua, F elicia C .
Gibson and George J. Raymond
have been named new asst. oper.
officers.
OMAHA: The Nebraska Bankers
A ssociation ’ s Bank Management
Seminar will be held on March 19
and 20 at the New Tower Motel.
OMAHA: Harold V. McLean, past
pres, of the Omaha Chapter of the
American Institute of Banking and
employee of the U. S. Natl. Bank,
has died in Mesa, A riz., at the
age of 73.
Robert J. Anderson, former teller
of the U. S. Natl., has been e le c
ted v.p. & cash, of the West Gree
ley Natl. Bank at Greeley, C olo.
PAPILLION: The Clarke Bank has
announced a $100 per semester
scholarship for one year of college
will be given by the bank to any
graduate in the top 35% of his
cla ss.

RIVERDALE: Mike Maul, a .c. of
the Riverdale State Bank, has been
named pres, of the Buffalo County

Bankers A ssociation.
)

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SCRIBNER: Mrs. Gesina Steil, who
has been associated with the First
Natl. Bank for over 55 years, has
been honored by having her name
listed in “ Who’ s Who of American
Women.”
WALTHILL: The First Natl. Bank
celebrated the opening of its new
bank building with an open house
March 9.

ch ief of staff at the St. John’ s
Hospital, has been elected to the
board o f directors of the Minnesota
State Bank.

SOUTH ST. PAUL: Forest Glewwe,
a.v.p. of the Southview State Bank,
has been promoted to v.p. & cash.
He also has been named to the
bank’s board of directors. Mason
Murch, Jr., has been promoted
from a.v.p. to v.p.

MINNESOTA NEWS
CANNON FALLS: Edwin Jaspers,
cash, o f the First Natl. Bank, has
been named to the bank’ s board of
directors.
EAST GRAND FORKS: Tom Gras
sel, ch ief clerk at the Citizens
State Bank since 1965, has been
promoted to a.c.
MINNEAPOLIS: The Metropolitan
State Bank have made the follow
ing changes: Morris A. Olsen, pro
moted from cash, to v.p. & cash .;
Bernard L . Smith and Jamés A. Ol
sen, from a .c .’ s to a .v .p .’ s.
NORTHFIELD: Leo V. Flynn has
been named a .c. of the Northwest
ern State Bank.
NEW LONDON: Myron J. Johnson
has been appointed a .c. at the
Farmers State Bank. He comes to
the New London bank from the
Capital City State Bank of St. Paul,
where he had been employed since
1956.
MANKATO: Robert A. Rylance, an
employee at the First Natl. Bank
since 1965, has been named a.c.
MONTEVIDEO: Richard E. Benson
has been employed as an install
ment loan off. at the First Natl.
Bank. He was previously loan off.
for the Alan Plan Corp. in Des
Moines.

STILLWATER: The First Natl.
Bank has installed a TV drive-in
window on the bank’ s parking lot.

SOUTH DAKOTA NEWS
VERMILLION: Victor A. Jorgen
sen has been named a.c. at the
Vermillion O ffice of the Natl.
Bank of South Dakota. He joined
the Natl. Bank of S. D. main office
staff, in 1963 and at the time of
his transfer was asst. mgr. o f the
timepay dept.

COLORADO NEWS
DENVER: The South Denver Natl.
Bank has announced three major
changes in its key officers. Weldon
B. Hamilton, formerly bank pres.,
has been elected chmn. of the
board. He also is pres, of the
Cherry Creek Natl. Bank of Den
ver. Charles B. Novak, formerly
exec, v .p ., has been elected pres.,
and Morris A. Day, previously v.p .,
has been elected exec. v.p.

CECIL
M EANS....
A GOOD MAN
TO KNOW
WHEN YOU
NEED SPECIAL HELP

ST. PAUL: Dr. Frank Ghertner, Jr.,

fc/Rk Ç ross C o
BANK PLANNING
Waterloo, Iowa

STOCKYARDS
NATIONAL
BANK *
Omaha, Nebraska

Member FD1C

ROLLA: Roger Petersen has joined
the staff of the First Bank of
Rolla as an employee in the timepay dept. He comes to the bank
from a position with a Hopkins,
Minn. bank.

MONTANA NEWS

DICK WEYRAUCH

AL HIGHUM

Your ‘1st Team’ for correspondent
service in SOUTHERN M IN N E
SOTA and IOWA call 612-334-4141

First National

BANK OF MINNEAPOLIS

_______________ MEMBER F.D.I.C.____________

NORTH DAKOTA NEWS
ALAMO: The American State Bank
at Williston has opened a paying
and receiving station here. Plans
are being made for the construc
tion of an $18,000 one-story build
ing in the spring. Until that time,
business will be conducted in a
trailer. Ronald Lund, employed by
the Williston bank since D ecem
ber, will be mgr. of the Alamo
station.
LANSFORD: The Lansford E x
change has become a facility of
the American State Bank in Minot.
C. L. McKeen, who has been oper
ating the exchange since 1941,
will be mgr. of the new facility.
Temporarily, the new office will
be located in the building used
by the exchange, but new quarters
are being sought.

BUTTE: The Metals Bank & Trust
Co. has changed its title to First
Metals Bank & Trust Co.

WYOMING NEWS
CHEYENNE: Application for auth
orization of the First Cheyenne
State Bank has been approved by
the state bank examiner. The new
bank, which will be the first state
bank in Cheyenne since 1924, will
be capitalized at $350,000 and
will be located in the vicinity of
the municipal airport. Byron Hirst,
Cheyenne attorney, will be pres,
of the new bank.

Student Loans. . .
(Continued from Page 1)
to create a Federal “ reinsurance
program,’ ’ under which the Fed
eral Government would reimburse
State agencies for 80% of the de
fault claims paid by them, and to
authorize an additional $12.5 mil
lion in seed money to be paid to
the State guarantee agencies on
a matching basis.
A lso receiving the A ssociation ’ s
support were suggestions that the
interest cost subsidy paid by the
Federal Government be discontin
ued in the post-graduation period
and that the college financial aid

officer
orized
respect
student

be given a clearly auth
role in the program with
to recommending individual
borrowing limits.

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No. 1086 Northwestern Banker is published five times monthly by the Northwestern Banker Company, 306 Fifteenth Street, Des
Moines,
Iowa 50309. Subscriptions 50tf per copy, $6 per year. Second c la ss postage paid at Des Moines, Iowa. Address all mail

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Full text of The Northwestern Banker : March 11, 1968, No. 1086

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