DANIEL J. FORTE – ‘Seamless process’

The Community Bank League of New England has long been an advocate for the small banker, offering products and services to institutions in which executives may wear many hats. So when rates for the health insurance product it offers were projected to soar, CBLNE President Donald S. Glass made a deal that ensured the health coverage for members through a smooth, quick transition.

“Like everyone else, we experienced an increase in our health insurance. We [already] had a significant number of our members insured by Blue Cross [Blue Shield of Massachusetts] under the Massachusetts Bankers Association, and we went to Mass. Bankers to see if there was a way to get those members who weren’t currently covered under their program covered. It happened fast, it was seamless and everything went fine,” said Glass.

Harvard Pilgrim Health Care lost 75,000 clients at the end of last year, among them 38 CBLNE members representing hundreds of policies. The reason for the Community Bank League shutoff of the health insurance product was the rate hike of about 60 percent. Only 17 of the CBNLE members who subscribed to the service and needed insurance were not members of the Massachusetts Bankers Association as well; therefore, Glass worked with MBA President Daniel J. Forte to allow for membership and inclusion in the health insurance product.

“Don and I worked together on it with the members to get the forms in on a timely basis. Blue Cross worked very hard to do the conversion and get all the cards out so that it was a fairly seamless process to get everybody covered,” said Forte.

While the event brought the two organizations closer, they remain distinct in the way they serve members.

“One of the things we offer is a voice for community banks, for small banks. It’s something that our members tell us that frequently they don’t get the kind of responses they’d like to get from other associations. We happen to be very responsive to small banks,” said Glass.

But while some who spoke with Banker & Tradesman said they had no plans to leave Community Bank League, the rate hike did benefit the MBA.

“We represent now about 98 percent of all the banks in Massachusetts. Prior to this, we represented 91 percent of all the banks in Massachusetts,” said Forte.

Forte said the MBA is continually courting new members, as are other organizations, and he believes his association has a lot to offer the new members.

“The smaller banks get a tremendous benefit by having the larger banks at the table because they get a lot of resources that they wouldn’t get otherwise,” he said. “For example, in Y2K compliance and Fair Lending issues, we get to pick the technicians in the large banks’ brains and come up with ways to help smaller banks in meeting those challenges,” said Forte. But that may be a hard sell to small bankers who are used to products focused specifically to them by the CBNLE.

“Our programs and seminars are hands on. Our members go back to their banks with materials they can put right to work … hit the ground running, so to speak,” said Glass.

Mirror Image
For John J. O’Connor III, chairman, president and chief executive officer of South Coastal Bank, being a member of both organizations suits his bank the best. O’Connor has purchased health insurance through the MBA for a long time, he said, but two years ago the bank joined the Community Bank League anyway.

“Insurance is just one piece of the action. Community Bank League does a number of things. They do a lot of lobbying, they do a lot of educational pieces. They do regulatory updates, from a different perspective from the MBA. The Community Bank League focuses specifically on community banks. Mass. Bankers represents everyone. So it’s a different kind of organization, and you join it for different reasons,” he said.

“I think we’ve always had to overcome the perception that this is a large bank trade association. Partly through the mergers and partly through information, I think when smaller community banks join us for the first time, they look at our board and they realize that it’s all community bankers with the exception of Fleet on the board. You look at the committee structure, [and] it’s primarily community bankers. It’s one bank, one vote when we have issues with which we have to contend,” said Forte.

For Steven Lowell, senior vice president of Yarmouthport-based Cape Cod Co-Operative Bank, the attention that CBNLE pays to small bank issues keeps him in the league.

Cape Cod Co-operative is a member of both MBA and CBNLE and doesn’t purchase insurance through either.

“Certainly, there are a lot of similarities. I think that members of the Community Bank League have tended to feel that the league focused on smaller institutions and, as a result, before any merger can take place, there needs to be some assurances that the interests of those smaller institutions will not be lost,” Lowell said.

Rumors of mergers among trade associations constantly circulate, but specific action would only result if there were an outcry from the membership, said both Forte and Glass.

“We trade associations are just a mirror image of the industry,” said Forte, adding that historically, there were many trade associations in Massachusetts representing savings banks, commercial banks and co-operative banks which have since evolved into two organizations.

“At some point, if we’re agreeing on 98.9 percent of all the issues, does it make sense to have one trade association with one voice where we can get the benefits of diversity of the industry and hammer out our issues and go with one voice down to Beacon Hill and down to Washington? I think in the long run, it makes sense. It doesn’t mean it has to happen overnight but it’s really up to the bank members,” said Forte.

Community Bank League formed in 1994 from the New England League of Savings and the Massachusetts League of Community Banks. It has 100 members. Merger talks with the American Bankers Association were called off in the fall of 1999 after the two sides failed to reach an agreement on who would lead the new group and how it would be governed.

The MBA, which merged with the Savings Bank Association of Massachusetts in 1986, has 230 member banks.

While there are no plans for mergers, the latest action certainly brings the two groups into a closer relationship. “I see the two associations becoming more entwined. How that will shake out, I don’t know,” said O’Connor.