After much speculation over the winter about when it would happen, the Massachusetts Bankers Association and the Community Bank League of New England announced last Wednesday that the two will combine their forces into one larger, stronger group under the MBA umbrella.

The move comes just five months after the MBA offered to extend its member health insurance through Blue Cross Blue Shield of Massachusetts to CBLNE members. The association was approached by CBNLE President Donald S. Glass shortly after he learned that rates for his members through Harvard Pilgrim Health Care would soar some 60 percent.

According to Dale Zelony, director of legislative services for CBLNE, the talks surrounding the process for the change were “very short,” and really came to a head during CBLNE strategic planning in January.

“We certainly did a very formalized strategic planning process with the goal of trying to decide how we could go forward in a viable fashion. There are many changes in the industry … Many of our members get health care through Mass. Bankers. If there’s a downturn in the economy – bigger than we’re currently experiencing – they’re going to look and say, ‘Can we really afford to pay dues to two associations?'” said Zelony.

Members of the MBA voted unanimously last Wednesday to approve the union. Members of the CBLNE had voted unanimously five days earlier to endorse the action.

“We are pleased that the members of the MBA and CBLNE have voted in favor of this new venture, and we look forward to advancing the interests of community banks and working together on the myriad of issues facing the financial services industry today,” said John McCarthy, president of Wakefield Co-Operative Bank and chairman of the MBA. “It is critical in this evolving world of financial services that the banking industry speaks in one, unified voice.”

‘United Message’
The MBA will extend membership offerings to the seven out-of-state CBLNE member banks.

“In some ways it’s a little different for us but in other ways, we’ve represented out-of-state banks before through the affiliates of holding companies,” said Daniel J. Forte, president and CEO of the MBA, referring to such entities as FleetBoston Financial, Citizens and People’s banks.

Wayne Cottle, president of Dean Bank and chairman of the CBLNE, said, “Our membership is dedicated to working together to ensure a smooth transition with the MBA. As competition from non-banks, mortgage companies and tax-exempt credit unions continues to increase, this new organization will create the best of both worlds from a community bank perspective and will deliver a united message to the Legislature on Beacon Hill and in Washington, D.C.”

“When you have diversity and you can work your problems out around the table and then go up to the Hill with one unified voice or down to Washington, it just makes it a much stronger organization for the members, not to mention the savings the banks have by having one organization,” said Forte.

But some in the industry raise the question of lack of choice.

“One thing about this job, as you know, is we will never please everybody all of the time,” said Forte. “I can’t do it now in this association. Don [Glass] could never do it in his association. The key is to develop a process through the committee structure where everyone gets an opportunity to voice their opinion. It’s one bank, one vote.”

The merger will become effective July 1. Staff from CBLNE were offered positions within the MBA. Glass will take on a consulting role for a time and then take early retirement, according to Forte. Zelony also has been offered a position in the legislative division of MBA. Gene Graham, former executive vice president, accepted a position with a private company in March. According to Zelony, his departure had nothing to do with the proposed merger.

CBLNE 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 agree 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.

Forte pointed out that the new merger is simply evolution. In the 1980s, he said, there were four trade associations in the state. When it came down to two, CBNLE had more outreach and “handholding,” as Zelony said, for its members. But with the additional staff, Forte said the MBA will be able to do more “high-touch” programs along with the “high-tech” approach to which members are accustomed.

“I truly am sorry the CBLNE is going away,” said Zelony. “But in this day and age when everything’s consolidating, the handful of things that we do in the CBNLE that the Mass. Bankers didn’t do could just as easily be done under one roof.”