The president of the American Bankers Association is urging community bankers to open their wallets to keep up the fight against credit unions and financial modernization.

Speaking at a conference of the Washington (State) Bankers Association late last month, ABA president William T. McConnell said community banks must put aside their frustrations over recent setbacks in Congress and continue contributing to political action committees.

"You can't afford not to be part of the system," Mr. McConnell told the audience of about 150 bankers.

Community banks have taken their in lumps in Congress this year. In April the House overwhelmingly passed legislation that would let credit unions expand fields of membership. Then in May the House narrowly passed a financial modernization bill that would permit insurance and brokerage firms to enter the banking business.

In a follow-up interview, Mr. McConnell acknowledged that he had seen no significant drop-off in contributions. But he said donations could dip as bankers grow increasingly disenchanted with politics. Indeed, some bankers have told Mr. McConnell they will no longer support lawmakers who have voted against banks.

"I know they are frustrated," said Mr. McConnell, who is also chairman and chief executive officer of Park National Corp., Newark, Ohio. "But I also think you may be cutting off your nose to spite your face if you say you're not going to make political contributions."

Ken Martin, chairman of the Washington Bankers Association's political action committee, said he has spoken to some bankers in his state who have sworn off political giving. He said most bankers still understand the importance of political contributions but that fund-raising could suffer in the wake of defeats in Washington.

Not that fund-raising is ever easy. Jennifer Johnston, legislative director of the Washington association, said its political action committee set a fund-raising goal of $67,000 last year for in-state lobbying. It raised about half that much.

Still, lobbying appeared to pay off in Washington State. All seven bills that the state's bankers lobbied against in the most recent legislative session were defeated, and all 14 bills the industry supported were passed, Mr. Martin said.

At the national level, the ABA seeks to raise about $1.6 million between congressional elections, said Gary W. Fields, treasurer of the ABA's political action committee.

Given the latest setbacks for banking in Congress, he said, bankers should consider increasing, not curtailing, contributions.

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