Community bankers are approaching Glass-Steagall reform with a mixture of hope and trepidation.
"It all depends on your outlook," said Bo Huffman, president of $120 million-asset Farmers Bank and Trust Co. of Blytheville, Ark.
Indeed, community bankers have vastly divergent views on what form of banking system Glass-Steagall's repeal should create. Some bankers embrace change wholeheartedly with an eye toward future profits. Others, particularly rural bankers, expect Glass-Steagall to be repealed, but don't expect it to benefit them in any way.
What all are sure of is that the nature of the banking system will change drastically in the next decade if Glass-Steagall is repealed. And not all are sure that change will be good.
James Shafer, chief executive of the $29 million-asset First National Bank in Tremont, Ill., thinks the Glass-Steagall repeal is "another nail in the coffin" of the dual banking system, a system, he said, "that's worked real well for a long time."
Nonetheless, Mr. Shafer, whose bank is nestled in a small farming community in the central part of the state, thinks change is inevitable.
"The change it will bring to this bank will be small, and it will be long term," he said. "The real change, and the real benefits, will be for the megabanks."
But Robert Richley thinks it will benefit his bank, too. Mr. Richley, who held senior positions at First Chicago Corp. and First City Bancorp. before taking over the $151 million-asset First National Bank of San Diego, is eager to be able to develop more products to offer his business customers.
"The exciting thing for small companies is that they, like us, are not tied down by brick and mortar," he said. "Efficiencies ... mean you don't necessarily have to be big. Sure, that's years down the road. But if you're evolving at the pace technology is, it can put you in a competitive position."
Other bankers just want to compete with the rest of the financial services industry.
"I feel that it should be repealed," said Craig Collette, chief executive of Landmark Bank, La Habra, Calif. "I think that the way the economy is making the world smaller, if banks are to compete they must have the ability and capacity to go into other types of products."
For instance, $240 million-asset Landmark wants to offer executive life insurance to its small business clients.
In contrast, Robert L. McCormick Jr., chief executive of Stillwater National Bank and Trust for 24 years and a former president of the Independent Bankers Association of America, is steeped in tradition.
"I was raised to believe that the combination of securities firms and banks was not a wholesome combination," said the Oklahoman. "It's a little bit unsettling to propose that they get slammed together.
"But the idea that we can go on in the banking business with the limited product we have and compete against the rest of the financial services industry is a misconception and a mistake. For the merger of securities and banking, the time has come."
Broader concerns about the ownership structure of commercial banks is what raise the most concern. All the community bankers contacted for this story think it's a mistake to condone the joining of industrial companies and financial companies. That approach is being forwarded by Sen. Alfonse D'Amato, R-N.Y., chairman of the Senate Banking Committee. A more restrictive proposal, barring nonfinancial companies from owning banks, is being proposed by Rep. Jim Leach, R-Iowa, chairman of the House Banking Committee.
"I'm flat out not in favor of cross-industry ownership," Mr. Huffman said. "That would be dangerous."
"If you allow major concentration of financial and industrial power, historically it always leads to an unhealthy situation," Mr. Collette said.
Proposals to allow cross-industry ownership only serve to make Mr. Shafer more fearful - both for his bank and his community.
"Community bankers a lot of times come across as whiners," he said. "But we're keeping up. We're serving our customer well and loyally. We do what we can to serve the local hardware store, more than what NationsBank would ever do. And Congress sometimes forgets that."
Finally, he quipped, "I prefer always, probably as any poor, dumb country banker does, that things remain the way they are."