MACB Committee Leaders Meet
The Maine Association of Community Banks held its annual gathering of committee chairs Aug. 26 at the Harraseeket Inn in Freeport. On the agenda were a discussion of industry trends and issues and plans for association projects for the coming year. MACB Chairman Sherwood Moody of Mechanics Savings Bank was also present, along with MACB staffers Chris Pinkham, Kathy Meehan, Kathy Keneborus and Pam Green.
Below are thumbnail sketches of topics discussed:
• Security notices – Banks should be reminded to notify the trade associations of every incident of fraud, scam and theft, for quick distribution to all banks.
• Identity theft – Procedures have been mandated, and everyone from the teller to the branch manager must be aware of them and know how to follow them.
• ATM safety legislation – Banks should beware of legislation tinkering with lighting and other physical surroundings. A measure is on the table in New York state to require a 9-1-1 connection available from every ATM site.
• Camera phones – Camera phones have been used in bank lobbies for photographing physical structures and capturing customer information left in view.
• Check 21 – Customers must be educated, but how much is enough? No need to go overboard – shades of Y2K. Customers will lose float and may not view it as a good thing.
• Risk management – Risk management is receiving more attention. Some banks have hired a corporate risk manager.
• Regulatory exams – The regulators are asking Fair Lending questions on consumer loans. They are also looking at Regulation B in regard to commercial loans.
• Privacy – Customers complain it’s annoying to receive privacy notices every year, when nothing has changed, but federal law requires it.
• Compromised debit cards – Many incidents of this occurred last spring, with some cards compromised more than once. Having to hot-card the same customer twice is not good for customer faith. Most believe it is the fault of the bank, rather than the retailers.
• Jobs and salaries – Banks have to be watchful not to lose employees with transferable skills such as information technology and customer service to other industries. It is sometimes hard to find comparative salary information across industries. In incentive compensation plans, finding an equitable solution for non-customer-contact employees is difficult. Some use year-end profit-sharing formulas, but giving employees incentives throughout the year is a challenge.
• Health care costs – Banks are building wellness and ergonomics programs in order to help maintain health. Sometimes issues of safety make ergonomics difficult to achieve on the teller line.
• Competition – Competition among financial institutions is severe and can lead to higher interest rate risk and lower quality.
• Quality control – Automating lending brings high quality-control demands. Some banks are turning to outside consultants for quality control and documentation; others are hiring someone in-house. With good quality-control measures in place, collections are nil.
• Insurance – Banks are still seeing customers unable to obtain homeowners and other insurances.
• Smart cards – So far these are in retailers’ domain (gift cards), with retailers’ card readers using magnetic stripe technology. In order for smart cards to become standard, merchants would have to install terminals with chips to read all cards.
• Construction loans – The No. 1 complaint to the Bureau of Financial Institutions is construction loans. Maine does not have a licensing law. This will be an association priority.
• Collections – When interest rates rise, people will be pinched again, and collections will be more of a challenge. The transfer to a sales culture can also have an effect on collections if documentation and quality control are not in place.
• Maine’s economic environment – Maine needs to be more pro-business and must find something to replace the lost jobs in paper, shoes and textiles. What will be the next sustaining business in the state? Maine estate-tax law has not kept up with federal law, and Maine stands to lose high-income residents to other states.