By Roger Bosma
First of all, I want to express my appreciation to the board of trustees of the New Jersey Bankers Association for the opportunity to serve as your chairman. It’s truly a pleasure for me and I look forward to working with the board this year.
I am also appreciative and very grateful that we have a new president and CEO, John McWeeney, and I look forward to working with John as well. When Mike Quick asked me to be the chairman of a search committee for a new president and CEO, I willingly said “yes,” with the priority to have that person in place by the time I became chairman. Goal achieved!
I’ve asked Vice Chairman Norm Beatty, chairman, president and CEO of First Hope Bank, to work closely with John to help him succeed. We have set an aggressive schedule for him, which includes meeting with the membership at their banks, visiting with state executives in New York, Pennsylvania and Maryland, upgrading our educational process and elevating the level of professionalism of the New Jersey Bankers Association, and I am confident we will do that.
I’d also like to thank another group. They are my true supporters, they are my loudest hecklers, they are my bosses and they are my friends. They are the board of directors of Lakeland Bank. I am very appreciative of the bank board’s willingness to share me this year with the New Jersey Bankers Association.
Lastly, I want to thank my wife Holly – my chief supporter and my best friend. Thank you very much for your support over the years; I think we’ll have an exciting year. It’s been quite a ride so far!
It’s been an interesting and difficult year at NJBankers, and I’m very appreciative of the staff: to Rob Tartaglia for stepping up, for keeping order, for maintaining our voice in Trenton and managing the association through the transition. To Tim Doherty for volunteering to work on the Convention, while still maintaining our communications and the technical side of NJBankers. To Mary Lou Hessman, Sabrina Younossi, Jane Eiseman, Jane Swanson and Lorraine Holcombe, who provide great support for the association. And I am especially appreciative of our immediate past chairman, my friend, Mike Quick. Mike provided leadership when the association needed it the most.
I was very pleased to have at our convention the president of the New Jersey League of Community Bankers, Jim Silkenson, and Bob Monteith, president and CEO of NVE Bank and the League’s chairman.
NJBankers and the League have worked closely together on many areas: seminars, education and workshops. We have labored together on a number of issues and should continue. We have worked together in the past to defeat the Credit Union Regulatory Improvement Act; that legislation has been reintroduced and we need to work together to defeat the bill again.
When I agreed to “go through the chairs” of NJBankers, it really wasn’t my intent to become chairman. That may sound strange but that’s the case. Let me explain.
Over the years, NJBankers and the League have had a number of discussions about merging. We have more things in common than not, and it only makes sense that we would join forces and become a louder voice, primarily in Trenton. Thus, my goal was to become an officer so that I could be a catalyst to try to amalgamate the two organizations.
Well, I failed! It didn’t happen – but it will. Not this year and maybe not next year. It only makes sense that we work together as one organization, so one of these days…
Perhaps we should try another tactic. Instead of getting married, perhaps we should first get engaged. What I mean by that is something Ray Hallock, the president and CEO of Columbia Bank and former League chairman, and I talked about a few years ago. And that’s holding a joint Senior Management Conference. We both currently hold our Senior Management Conference at Seaview, only a few days apart. Why don’t we hold a joint Senior Management Conference? I know we can’t do that in 2007, but maybe in 2008. I think that’s something that both of our boards should consider.
I would also like to note that New Jersey Commissioner of Banking and Insurance Stephen Goldman was a featured speaker at our convention. It’s been a long time since a commissioner of banking has been to one of our conventions. It’s also been a long time since NJBankers felt we had an advocate or a friend at the commissioner level. Well, I believe we have one now. In mid-March, Goldman reached out to NJBankers looking for input about the de novo branching issue, and a number of bankers met with him.
It’s been a long time since a commissioner has invited bankers to Trenton to get their viewpoint on a specific issue, so I appreciate the fact that the commissioner is open and ready to work with us.
One other issue I want to focus on is the rising cost burden for banks from identity theft, where retailers don’t properly protect their customers’ information. When that information gets compromised, we have the expenses associated with repairing the reputation risk involved.
Let me tell you about Lakeland Bank’s experience. In May 2004, one retailer had debit card information stolen. That stolen information affected 3,400 Lakeland Bank customers, and it probably affected a lot of other bank customers as well. Lakeland decided the best thing to do was to reissue those cards to protect our customers. The reissue of those cards cost the bank $18,700. Then, in August 2005, another card processor for retailers had a breach, and the reissue of 5,000 compromised cards cost us $27,000. In June 2006, another breach at a retailer cost us $9,000 to replace 1,618 Lakeland cards. In the latest breach of a national retailer’s credit files, Lakeland’s cost was $31,515 to reissue cards.
Those breaches were not Lakeland Bank’s fault, yet our reputation was at risk, and the cost to make our customers comfortable was almost $100,000. We need to work together with the League and through our Action Bankers Council to promote a bill similar to the legislation being introduced in Massachusetts – House Bill 213 – which would put the burden of identity breaches on the retailers. The legislation would require retailers to pay losses that occur as a result of security system breaches. That bill would require retailers to reimburse banks for the cost of reasonable actions that banks take in responding to data security breaches, including cancelling and reissuing cards, closing accounts, stopping check payments, etc.
So with the Action Bankers Council, with support from the commissioner and with help from the League, we’ll get this done this year.
I would like to put a challenge out to our member banks. There are significant benefits for our vendors to become affiliate members of the New Jersey Bankers Association. The networking and referrals that are generated because a vendor is an affiliate member are tremendous. Plus, the association benefits from the nominal dues that are paid. We bankers need to review our list of major vendors and ask them to join. Many of our vendors don’t even know that level of membership is available. So please ask.
Affiliate membership falls under the NJBA Service Corp. I have asked Jim Hyman, president and CEO of Hopewell Valley Community Bank, to chair the Service Corporation Committee. Jim is especially passionate about the Service Corp. and I anticipate the ranks of membership will increase substantially this year.
On June 5 and 6, we made our annual legislative trip to Washington, D.C. The interaction with the Comptroller of the Currency, a governor from the Federal Reserve Bank, the director of the Federal Deposit Insurance Corp., the president of the American Bankers Association and our elected officials was excellent. Last year we had 12 bankers go; this year we had a record of 30 bankers making the trip.
We have a very exciting and challenging year ahead for the New Jersey Bankers Association, and I am looking forward to hearing from you and reporting to you on our activities on behalf of you, our members. Thank you again for the opportunity and privilege to serve you and our industry this year.
Roger Bosma is president and chief executive officer of Lakeland Bancorp. This column is adapted from Roger Bosma’s remarks at the 2007 NJBankers Convention in Palm Beach, Fla.