A number of angry community bankers have charged the California Bankers Association with paying lip service to their needs while actually catering to the big banks. At least two banks have quit the group over the controversy.

The unusual defections, which began last week, came in the aftermath of the state's recent bitter interstate branching fight.

The bankers were outraged when the group, California's dominant bank trade association, claimed credit for a key provision in the state's "opt- in" bill, when in fact it had fought against the provision, they said. The measure requires that newcomers to the state buy a whole bank, not just a branch.

The association's statements "flagrantly disregard the truth on this issue," wrote Charles T. Chrietzberg, chairman of Monterey County Bank, in a fiery open letter two weeks ago. "As an independent banker, I no longer have any trust or confidence in the California Bankers Association."

At least two banks have withdrawn from the group. Another three have written letters demanding an explanation of the trade group's actions, and more could follow, bankers said.

Mr. Chrietzberg, who was the first to withdraw, said he has received about 10 letters and phone calls from community bankers sharing his sentiments. He said he thinks 20 to 30 banks will eventually pull out of the trade group.

Larry Kurmel, executive director of the California Bankers Association and author of the statements that sparked the controversy, denied deceiving his membership about the association's stand on the provision. Such divisions are not new to bank associations, he added.

The California skirmish is the latest, and one of the more dramatic, examples of the deepening rifts in bank trade associations between the small banks and the big ones.

"It's long been felt that the CBA was being controlled by the large banks in California," said Mr. Chrietzberg. "They're the largest dues payers, so they have to listen to them. But they never even asked the small banks what we felt on this issue."

The association has a total of 336 members, more than 300 of which are community banks. The seven members with assets of more than $5 billion pay 36% of the organization's dues.

The controversy stemmed from an important amendment to the state's opt- in bill for interstate branching, legislation passed by the California legislature at the end of last month. The amendment allows out-of-state banks to move into California only through buying a whole bank, rather than by simply buying a branch or starting a branch from scratch.

The California Independent Bankers, a community bank group, drafted the amendment - considered imperative to protecting the franchise value of community banks - fought hard for it, and eventually won. The California Bankers Association, however, in a recent member newsletter implicitly claimed credit for the victory, even though many thought it had opposed the provision throughout the legislative process.

Mr. Chrietzberg, who spent three weeks in the statehouse monitoring the passage of the bill, was enraged when he read the newsletter.

"It's bad enough that they didn't support us and didn't ask us for our opinion," he said. "But they fought that amendment all the way through and then turned around and took credit for it."

The statement in question reads: "We told you this would be done in this manner in the June 5th edition of Current Events, and it is done."

Mr. Kurmel defended his statement by saying that his association did not oppose the provision, as Mr. Chrietzberg claimed. It initially opposed it, but then switched its stand in late May after a board member suggested revisiting the issue, he said.

"We didn't oppose the amendment, and the big banks didn't give a damn about it," he said. He added that the divisions over the issue were between small banks, not between big and small members.

Mr. Kurmel acknowledged that more "sensitivity" had to be given to soliciting the views of all members of the association. The association will probably make some "adjustments" to this process in the future, he said.

State and national bank association directors said such quarrels between members are unusual but not unprecedented. The interstate branching struggles of the past year in Texas and Colorado, for example, prompted similar defections of longtime members.

The last issue that caused this degree of rancor between bankers in California was probably the interstate banking legislation addressed in the mid-1980s, observers said.

"It's going to get tougher and tougher for the state associations to carry water on both shoulders," said Kenneth Guenther, executive vice president of the American Bankers Association. "As they try to carry the water of the larger banks, that will be to the detriment of the smaller ones, and they'll face membership loss."

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