If we had a convention for those responding to our latest president for a day contest, we could hold it in the lobby of Schmidlap National Bank.

Or in the broom closet.

Our topic was "What can be done to keep our industry's trade associations viable in an era of bank consolidation?"

To be blunt, the response was hardly overwhelming.

In talking to bankers and trade execs to see why the topic did not generate more letters, I heard some interesting theories.

"Why should I write you with my secrets for survival?" asked one trade group official. "I am competing with about five or six other trade associations in a small geographic area for membership and income."

On a more positive note, the second in command of a community bank in New York State who formerly worked for several money-center organizations (and admits he has never been happier in his career than he is now) sent in this response:

"Basically, what trade associations have to do to remain viable is to expand continually the services they provide so members will be willing to pay whatever it costs to keep the association strong.

"In our case, for example, the Community Bankers Association of New York State is constantly bombarding us with communications of importance so we can be fully informed on everything happening that could affect us. Hardly a week goes by without some useful material reaching our desks."

Also it is possible that the trade associations will have to rethink whom they are serving and what the common bond of their members really is.

Maybe the future will see each trade group representing institutions that share common goals although they are from different segments of the financial services industry.

So just as trade groups now represent former enemies, banks and savings institutions, all under one roof, maybe an association will represent all the people who handle consumer loans - such as credit unions, banks, thrifts and small loan companies. For they have common needs in the areas of legislation, regulation, and public recognition and understanding.

Another extremely positive response was submitted by Samuel J. Damiano, president of the New Jersey Savings League.

He noted that his association, which represents 85 savings institutions with a combined $58 billion in assets and offers its members "educational, research, communications, government relations, and group health services," has merged with another trade group, actively solicited new members, and entered the endorsed product arena. But he stressed one achievement - the creation of an investment vehicle through which members can participate in affordable housing programs for community reinvestment act purposes - as the most important initiative for retaining membership.

"Trade groups that simply seek out fee-generating schemes that don't address the members' core business concerns and don't deliver value unavailable elsewhere will lose focus and may find members questioning why they are members," he said.

Our winning entry comes from a strong and vocal defender of community banking - Kenneth A. Guenther, whose trade association, The Independent Bankers Association of America, is recognized for its influence and viability.

Mr. Guenther's answer is largely based on rebutting the contention I expressed when the contest was announced that offering fee- based services to members as a way of generating income had a major flaw.

"Offering joint purchasing of supplies or consolidating insurance agency service puts a trade group in competition with the local vendors and agents - on whom local banks rely for deposits and good will," I had stated.

Mr. Guenther's reply:

"Not quite, Dr. Paul Nadler - sir - IBAA Bancard opened the door for community banks to issue their own cards and some 1,500 banks are doing this. Other IBAA services allow community banks to buy products more cheaply and to sell Visa travelers checks and Thomas Cook foreign exchange rather than contributing to American Express' bottom line.

"Others give community banks options other than going to increasingly unfriendly correspondents - this is what started us down this path. All our services build fee income for community banks and this is why they are so enormously well received - fee income plus giving them options."

So Ken Guenther, congratulations. You will receive your certificate showing that you will be the president of the Schmidlap National Bank for a day. And you may be sure that with a name like that our bank will never grow too big to be a member of the IBAA.

Mr. Nadler is a contributing editor of the American Banker and professor of finance at Rutgers University Graduate School of Management.

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