Opinions on Rates, Regulators, Taxes, and -- Beanies

The bankers who attended the annual convention of the American Bankers Association were a diverse lot.

About 44% came from institutions with assets of more than $100 million, and an equal number hailed from banks with less than $100 million in assets.

Six out of 10 came from small towns, and the rest were divided evenly between the cities and suburbs. Most were chief executive officers, but a third were not.

And fully one-third agreed that thrifts could be distinguished from banks by their tellers, who wear beanie hats and propellers. (More on that later.)

Questions from Moderators

We know all this because the ABA provided hand-held polling devices to those who attended the general sessions. The devices permitted the moderator of the moment to ask a question and almost instantaneously display the results.

Some of the most interesting questions apparently were deemed too controversial to touch, such as whom bankers plan to vote for in the presidential election.

But outgoing ABA president Alan Tubbs made up for it by bringing up a number of other pertinent issues.

On the question of interest rates, 66% said they should be held at their current levels, while 14% said they should be cut and 20% said they should be raised.

Tax incentives were favored by 59% of the bankers as the action most likely to stimulate the economy, followed by spending cuts and debt reduction at about 19% each.

The audience was evenly divided on whether a credit contraction existed in their local market. They were also split on the cause of any crunch that might exist.

Most blamed the regulators, but a third cited reduced loan demand and 24% pointed to tighter credit standards. Four out of five said they have tightened their credit standards over the past two years in response to changes in supervisory practices.

One in five said their relationships with their principal regulators were confrontational, and a third said the relationships were positive and cordial. The rest said their relationships were professional but distant.

There were some surprises. Forty-one percent said they had considered giving up their bank charters because of regulatory concerns.

Most said they were active lobbyists. Three out of four had visited or called their congressional representatives at least once in the past year and nearly half cited three or more contracts.

Fully 74% said they had communicated with their customers about the condition of the banking industry over the part year.

As Regards Funny Hats

Now about those beanies.

Mr. Tubbs asked a practice question at the beginning to get people used to pushing those buttons: What's the difference between an S&L and a commercial bank? A fifth said "nothing," 35% said S&Ls have no savings but still make loans, and the rest voted for beanie hats and propellers.

Stay tuned. The Savings and Community Bankers Association, the big thrift trade group, has its annual convention next month.

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