The latest issue of the Cross Keys Bank Report, a periodical sent to customers and friends by this $80 million-asset community bank in St. Joseph, La., epitomizes much of what is positive in independent banking and what enables smaller banks to beat their larger competitors time after time.

The journal featured the human side of the bank, including a picture of a snake that had climbed onto the drive-in window with the notation that the reptilian "customer" had been given close personal attention. It had two cartoons on the front page: one of a bank officer telling a customer: "We provide prompt loan decisions

- No." The other showed a teller asking a withdrawing customer "Do you have a denomination preference?" to which the customer responds "Oh, Presbyterian."

But to me, the key was the bank's posing two questions and asking its customers to find how other banks would have handled the response.

First, it asked: "What is the likelihood you would pay my overdraft check if I made a mistake and wrote a bad check ?"

Cross Keys' answer: "We paid 95% of depositors' NSF checks in 1993, saving them as well as the merchants honoring their checks a lot of hassle!"

Second, it asked: "If five checks on my account are presented in the amount of $200, $30, $25, $10, and $40, and my balance is only $110, how many NSF fees will I have?"

Answer: "At Cross Keys you would only have one, as the smaller items will be posted first." It then reminded the customer that at some banks there could be five NSF fees in the same situation.

This is community banking. And the smarts of Cross Keys Bank are shown not only by its customer-oriented fee policies but also, and equally important, by its publicizing this attitude.

What made Cross Keys' fee policies hit home with me is that, at the same time I received its newsletter, I also got a statement stuffer from my local institution, Summit Bank, stating that henceforward I would have to pay a $12 annual fee to keep my automated teller machine card. It further informed me that my use of the Cirrus and Honor ATM networks would continue to be charged separately.

I have lauded Summit Bank through the years both to friends looking for a bank and in this column. I have told how they called me personally to tell me that I had not signed the check to pay my phone bill and asked me if they

I have reported how they were so anxious to reward me with daily interest that I could not close an account, though I had only a onecent balance. Their policy of paying interest on even a fraction of a dollar led to that account's doubling, to two cents, in one month a 1200% annual rate of interest.

And I have loved the fact that tellers in the branches I use know me, so that I can cash a check without having to prove who I am.

'But that statement stuffer undid a lot of good will.

What is an ATM card for? It does two things:

First, it lets you have the convenience of getting cash when you are away from home. This has always been worthwhile - especially when you are out of the country and then benefit from getting your foreign exchange at the best bank rate available.

And I have never begrudged a fee for this usage of my ATM card at a Cirrus location.

Second, the ATM relieves the bank' s tellers of having to take the time to handle my cash withdrawals in the bank- a process that costs the bank far more than handling an ATM withdrawal does.

So what Summit Bank is now telling me is that I should pay $12 a year, even if I use only my own bank's ATMs. But can't a bank have a timer that charges only for the convenience of using the ATM when the bank is closed but allows free withdrawals when it is open and wants to encourage customers not to use the tellers?

I have been told a timer would not be hard to adopt.

But the key is that, little by litfie, free services are being made into fee services - no matter the balance maintained.

And as Cross Keys down in Louisiana shows us, this is the opposite of what makes bank customers loyal and enthusiastic.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.