State bankers conventions, like the one starting today at Saratoga, N.Y., have become more and more community banker affairs.

With correspondent banking a dwindling service, there are fewer and fewer of the giant parties that major city banks used to throw for their respondents around the state. As a result there are also fewer people from these large institutions attending.

The attendees are more likely to be the top officers and directors of the community banks in the state. And their hosts at the more modest social events that are being provided are generally the financial service companies that specialize in portfolio, operations, and other service help for the community bankers.

So while many money-center banks find their state's conventions to be non-events, to community bankers, gatherings like this week's 100th anniversary convention of the New York State Bankers Associations are top events.

To state association officials, the location and whom to invite have thus become more and more significant than ever.

Tough Choice

They are torn between having the convention close to the state capital, so top state executives can attend, or having them at resorts that are so attractive to attendees.

New York bankers are expecting some top figures in state politics to attend, because of the closeness of Saratoga to Albany.

This must be contrasted with the decision of New Jersey's new banking commissioner, Lisa Randall, not to attend that state's bankers convention in Bermuda last month.

She sent a videotape to be played for the delegates, but she told the Star-Ledger of Newark that she had based her decision not to go on the expense and the fact that it was out of the country, combined with "my view of the governor's program and the austere budget."

This is a shame, for the annual bankers convention is also an opportunity for lawmakers and regulators to get together with the leaders and the troops of the industry and learn what is going on, where needs are, and what officials might be doing differently.

Inviting officials was always a policy of the savings and loan leadership in the years when the thrifts were gaining more powers and favorable legislation.

Some Were Greedy

Sure, there were a few notable bad apples among the lawmakers who took advantage of the occasion for excessive freeloading. But most of the congressmen and state legislators invited used the opportunity to meet S&L officers, learn of the industry's problems, and, most important from the industry's viewpoint, be part of the discussions on what favorable impact on the public the requests of the industry for help might have.

But how do you reconcile the problem of getting the people like the banking commissioner to the convention at a lovely spot like Bermuda while not leading the man on the street to believe that the commissioner's position has been compromised?

A Genuine Dilemma

Jeff Connor, the Democratic New Jersey commissioner who preceeded the Republican Ms. Randall, reported that he had solved the problem of attending a convention in Orlando by using frequent-flier miles for the tickets and staying with his parents in North Palm Beach. But he explained that this was an unusual circumstance by stating for publication, "You can't expect the banking commissioners to pay their own way, and you can't let the trade group pay for you."

Of course one solution might be to have the bankers meet at locations that do not generate the fear of public outrage. Having a convention in state would certainly solve this problem and would also make the trip far less expensive for the state banking department to fund.

There is the another advantage to this policy, in that having the convention in state helps local communities.

I remember when the head of the Ohio Bankers Association, Ralph Bolen, explained why his group rotated among five major cities in that state for conventions, even though many complained that Toledo was too far from eastern towns.

"These towns count on our convention as a means of keeping their hotels and tourist businesses alive."

There is the other side of the story: that a convention at a resort or locale like Bermuda brings the bankers closer together and better able to share ideas and problems. And we all recognize that this is one of, if not the most important of, values of the convention tradition.

Bad Timing for ABA

But we do recognize the risks, such as the terrible press the American Bankers Association got when it went to Hawaii during the banking crisis of the late 1980s? And we have seen associations like the New York State Bankers cancel resort conventions at great expense and re-route them to hotels in the state's major cities because of the fear of public backlash.

But the fact that Commissioner Randall did not go to Bermuda to be with the people she regulates does highlight the conclusion that the industry does have a problem.

Maybe the answer is better public knowledge of what conventions are and what state officials do there.

Jeff Connor did admit that late in the administration in which he served, travel restrictions were eased -- a factor enhanced by the fact that most of these conventions were held within easy driving distance of Trenton.

Casual Contact Important

For an industry cannot be regulated with the best interests of the public in mind if the regulators do not have informal as well as formal contact with the regulated, and the annual convention is a natural place for such discourse.

We must get the public to realize that whether a regulator attends and addresses a convention (and therefore has expenses paid by the association) or goes at state expense, neither is a crime or an ethical violation.

Otherwise the public will be denied the opportunity to have as well-educated and informed a regulator as possible and thus also be denied the likelihood of the most sensible and useful legislation for the public's good as well as the health of the industry being regulated.

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