Incoming ICBA Head Focusing on Coverage Hike

Citizens Bank Inc. in Robertsdale, Ala., may close at 4 p.m. most days, but its president, Robert I. Gulledge, hardly keeps office hours.

How could he? Besides running the $85 million-asset bank he founded in 1981, Mr. Gulledge chairs two subsidiaries of the Independent Community Bankers of America and chairs or co-chairs two other ICBA committees.

And much to his delight, Mr. Gulledge will take on even more responsibility at the ICBA this week when he is officially elected president of the Washington-based trade group.

“I very much enjoy the world of banking,” he said in a recent interview. “It is very much my life.”

The former Alabama state senator said he never envisioned being ICBA president when he became a member 20 years ago.

Mr. Gulledge, who will succeed outgoing president Thomas J. Sheehan at ICBA’s annual convention in Las Vegas, plans to concentrate on meaty issues during his one-year term. Chief among them: doubling deposit insurance coverage to $200,000.

“People elect not to deposit more than $100,000 simply because they are not insured,” he said. “It is very difficult for community banks to grow deposits and meet loan demands.”

Expanding coverage would increase customers’ confidence in community banks, he said. Though the coverage level is ostensibly the same for all banks, Mr. Gulledge argued that big banks have an advantage because they are perceived as being “too big to fail.”

Doubling deposit insurance would not remove “the ‘too-big-to-fail’ issue, but it would give us the opportunity to develop the deposits of consumers who would not otherwise deposit with community banks,” he said.

A recent telephone survey by RSM McGladrey of Minneapolis found that 59% of community bankers support the proposal and believe such an insurance increase would cause deposits to jump by 10%.

Federal Deposit Insurance Corp. Chairman Donna Tanoue first suggested the idea a year ago at the ICBA’s annual convention in San Antonio. She is scheduled to address this year’s convention on Wednesday, and may give a preview of the agency’s official recommendations for reforming deposit insurance. The agency is expected to deliver those recommendations to Congress this month.

Also high on Mr. Gulledge’s agenda is tax relief.

“The present tax structure is devastating to community banks and rural families,” he said. Given the current prices of land and the status of agriculture, estate taxes are forcing landowners to borrow funds to maintain their property, he said.

“If we do not do something, I see an exodus of young people leaving the family farm — and I see this for small businesses as well,” he said.

To address the issues facing community bankers, Mr. Gulledge plans to actively seek new members for the ICBA — no small feat at a time when the number of banks is dwindling and competition for members among the major trade groups has picked up. Over the past two years ICBA’s membership has dropped 3.6%, to 5,300.

“Membership is especially important for us because of mergers and acquisitions that reduce the number of banks today,” he said. “It is very important that we have a broad base of membership and a unified voice for our industry of community banking.”

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