Sometimes I think that there are two separate worlds of community banking.

First there are the Cassandras who warn that community banks are dead, that their customers will all be stolen by the big banks with their broad base of new services and geographic convenience.

But when I attend community banker conventions, as I did twice in recent weeks, I get the feeling that independent bankers don't have a care in the world.

Large banks do tend to shoot themselves in the foot. They have grown rapidly, and have changed operations to take advantage of economies of scale and cost-cutting opportunities. But often it seems to be at the expense of personal service.

Typical is a story I heard at a recent meeting of the Community Bankers Association of Indiana. It seems an executive with $12 million in a corporate account at a large bank was charged a $27 fee for his wife's overdraft. This was a fee he had never had to pay before, because he had an informal arrangement to have funds transferred automatically from his personal account to cover her excess debits.

But when he asked to have the fee waived, the teller said no. Even after the executive threatened to close his account, the teller would not budge. So the executive closed his $12 million account and shifted it to a smaller bank.

Because of instances like this, community banks are growing nicely, thank you. Many report that when the independent bank across the street is taken over by a branch operation it is one of the best things that could have happened to them.

But this complacency that success is bringing may be the biggest threat to independent banks.

At independent banker conventions I attended in Indiana and Michigan, few said they are doing much with the Internet. And little has been done to develop brokerage, insurance, and money management skills to meet customers' needs in this changing financial world.

Another example of complacency is how seldom the ever-growing power of credit unions in competing against community banks is mentioned in convention halls. What seems obvious is that the banking industry needs Paul Reveres to warn about what amounts a nonbank invasion of bank turf.

Correspondent bankers used to be the catalysts for industry change. But now that nonmember bank reserves must be kept at the Fed, so fewer deposits are available to leave with respondent banks, the major city organizations have reduced their correspondent staffs drastically or given up the departments altogether.

Someone a trade group executive, perhaps needs to sound the alarm.

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