Craig Hudson came to California 10 years ago with a tough task: Increasing the membership of the Independent Bankers Association of America from just 50 in the state. Today it has 200 members in a state with 400 independent banks.

Yet Mr. Hudson is still frustrated by what he feels is a fractured and at times disconnected community banker community in the West.

On the eve of the California Independent Bankers' annual meeting in San Diego this week, he talked about his outlook and goals.

Q.: With the preponderance of independent banking groups in California, how effective can IBAA be?

HUDSON: There's no doubt that the independent bank community in California is factionalized.

The California Bankers Association has two independent bank groups, one for the north and one for the south. There's the Western Independent Bankers and then there's us.

My feeling is that as the changes sweeping California independent banking - consolidation, the economy and interstate banking - what is emerging is a strong, substantive base of California community banks whose leaders are recognizing the need for a strong trade association within the state. We need to get away from being factionalized if we are to be really effective. Until we do that, we will never be a true political force.

Q.: What are you doing to change that?

HUDSON: We are just trying to make our 200 members more politically active in Sacramento and in Washington.

Q.: Aren't they already?

HUDSON: In California, bankers have traditionally had a different attitude about political involvement. There's a prevalence of feeling that we are such a big state and so far away from everywhere else that our representative just won't listen to one person or group. And, because community banks here have historically been so profitable, there's a feeling that we can afford to ignore politics.

We do have bankers that are active, but much of my time I spend out in the field talking with bankers and bringing them to Sacramento and Washington. It's my favorite pan of the job. When bankers go and see how the legislative process works, when they testify and see how legislators react to them, it convinces them. It's like a civics lesson.

Q.: Has the bad economy hurt your association as much as its hurt some of your members?

HUDSON: We haven't had a net loss of members, though we have had 28 community bank losses in the last year-and-a-half.

There are too many people wringing their hands about the economy here, I think. I'm not saying that there's a disaster everywhere you look. But I would remind people that we got through the Gold Rush, we got through the Depression, and we'll get through this. There are a lot of former defense workers starting up companies that are being called gazelles, and these are natural customers of community banks.

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