James D. MacPhee, who will become chairman of the Independent Community Bankers of America this week, has the right pedigree for the job at the right time.

He has worked at a small-town bank in western Michigan for 35 years, serving as its chief executive for the past 17 years, and has seen the industry rebound from several crises. More important, his Kalamazoo County State Bank in Schoolcraft has been a survivor in a state synonymous with the worst effects of the recession.

His principal goals for the 5,000-member ICBA are stressing a back-to-basics approach, and sending the message that most community banks are viable and willing to lend.

"My biggest challenge this year will be to try to get the word out that community banks are alive and well," he said in a phone interview this week, just before the group's annual convention was to begin Wednesday in Orlando. "We are common-sense bankers. This is a relationship business that we're in."

MacPhee says he is well aware of the myriad challenges facing community bankers as they cope with heightened scrutiny from regulators, await the outcome of financial regulatory overhaul legislation in Washington and go up against bigger banks eager to expand in their markets. Yet he says the community banking industry also faces a public relations test — namely, to let the public know that these institutions are by and large not failing, and that they are trying to lend to their customers.

"My hope would be that we could somehow end this financial crisis, get community banks back in a position where they can lend in their communities and have every confidence that their years and years of experience running community banks will be honored by regulators and others," he said.

As chairman of the ICBA, MacPhee succeeds Michael Menzies, the president and CEO of Easton Bank and Trust in Maryland. Menzies' priorities in his year as chairman were to underscore the role community banks play in the economic recovery, work against undue attention by regulators and try to convince the public that not all banks engaged in activities that led to the financial crisis.

MacPhee applauds the work his predecessor has done on these issues and says the ICBA was especially successful in getting the administration to pay attention to their concerns. MacPhee joined Menzies and other community bankers at the White House in December in a meeting at which President Obama underscored that he did not believe community bankers caused the financial crisis.

In an interview with American Banker after that meeting, MacPhee said he joked with Obama during the session that, "We are all in favor of regulatory reform — if you can keep community banks out of it."

In the interview this week, MacPhee said that, though he was joking with the president, he believes that the financial overhaul legislation now making its way through Congress is justifiably a big concern of community bankers, who fear they may be "punished" for improper decisions big banks and other institutions made.

"We didn't get involved in subprime and some of the other issues that the larger banks did," he said. "Are they going to change the regulations and laws to put us in a position that we can't compete?"

Another big worry he hears from community bankers as he travels the country, MacPhee said, is that regulators are too quick to crack down on smaller banks without giving them enough time to correct problems not of their own making.

"It's tough being an examiner in this environment, I realize that," he said. "But we think that further regulation of community banks that did not create this mess is unfair and ineffective."

While the part of Michigan where MacPhee's Kalamazoo County State Bank is based is not experiencing the same hardship as other areas of the recession-weary state, MacPhee's leadership role in the Michigan Association of Community Bankers — he has served as a director and as the group's president — have given him insight into the troubles that certain hard-hit regions of the country are facing.

Don Mann, a former deputy banking commissioner for the state of Michigan who is now an independent consultant, has known MacPhee for nearly 40 years and proudly says, "I was his regulator." He says that MacPhee's bank "weathered the storm" of the financial crisis and as such, MacPhee understands what others are going through.

Mann says MacPhee is especially empathetic to those banks suffering the "crushing blow" from the decline in real estate values in many communities.

"It's happening in Michigan, it's happening in Atlanta, in Florida and in other crisis points in our country," he said. "Jim MacPhee understands that. He knows what these bankers are going through."

The theme of the ICBA's conference — which was expected to draw attendance of 3,000 — is "Empowering Main Street," and MacPhee said even if that is a bit hokey, that's what he hopes to do as chairman — help community bankers get back to basics and serve their communities even as he and other high-profile bankers seek to persuade regulators and lawmakers in Washington to give them room to do just that.

"We have many, many challenges," he added. "But we want our banks to be strong so that when this economy turns around, they can turn around with it."

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