Community Banks to Welcome the "Golden Egg" of Financial Reform, Thanks to New Congressional Provision

Online, August 9, 2010 (Newswire.com) - East Berlin, CT -- "A golden egg has been laid from the grim remnants of financial services abuse and losses: the freedom for banks to pay interest on business checking accounts." So says John Hamby, founder and president of Advanced Business Checking Solutions(ABCS).

Hamby, speaking from his company headquarters in East Berlin, CT, was responding to a provision recently approved by Congressional financial reform conferees allowing banks to pay interest on business demand deposit accounts for the first time in eighty years.

"Through a brilliant but simple legislative change, banks have been provided a wonderful opportunity to offer their best business customers fairer value for their checking deposits on a fully transparent and more accountable basis than was previously allowed," says Hamby, who founded ABCS to assist community banks with creative business checking solutions.

"Hundreds of thousands of those businesses, which represent the essence of the free enterprise system and account for the core of new jobs and much of the hope for economic recovery, will be introduced to bright new hybrid checking products that offer a combination of soft dollar earnings credits and hard dollar interest."

According to Hamby, the days are gone in which unused monthly earnings credits expire when not immediately used. Also gone, he says, will be the days of 'sweep fees,' which are charged to offer overnight transfer of excess funds to interest paying investment vehicles.

"Gone, too," he adds, "will be the days when swept funds move from the community to the amorphous money markets."

The state of community banking, community businesses, and the sometimes indecisive relationship between the two are becoming important news stories in both the business and local press, and Hamby has been a noted observer with his views and calls to action. "In the place of the old will rise bright new hybrid business checking products designed to capture the imagination of businesses with solid checking balances of mid-five-figure amounts and more," explains Hamby, who ran a successful community bank for about 20 years and has been a prominent community banking advocate for many more.

"Banks will once again be able to base solicitations on business checking, as they did in the past. Enhanced checking accounts will provide substantially improved connectivity to attractive community bank offerings of remote deposit capture, ACH originations, energized merchant services and other fee income-based services. Community banks will finally be able to compete more effectively against non-banks, which lend to businesses without the typical mandated checking tie."

At stake, according to ABCS, is one trillion dollars. That amount includes $700 billion being swept out of banks daily, and other funds going to other short term investments, which may now be recaptured. Business checking balances are already high on the mind of community bankers, Hamby says. Their current desire for higher levels of business checking balances has not been matched with effective-enough checking products; in addition, their solicitation efforts lack confidence.

"The repudiation of the Great Depression prohibition on interest payments on checking balances will enhance the attractiveness of bank-exclusive business checking offerings," Hamby insists. "It is the most exciting and positive win-win scenario of recent financial reform legislation. The community bankers we're talking to are excited about the prospects while exhibiting some anxiety over the change in checking account products and procedures and, maybe more so, over the host of other changes required by reform."

Hamby emphasizes that the public is rooting for the community banks to match their passion for the community and the businesses and individuals they serve. That passion, he says, can only be matched with enhanced products that are better suited for a very competitive financial services marketplace. "We are positioned to assist those community banks with education, experience, unique supplemental software and products, sales and, most importantly, confidence."

About John Hamby

ABCS president and founder John Hamby has more than 40 years of banking experience on the national and community levels. He has crafted and developed numerous creative solutions to the needs of banks and business, including the most powerful check clearing system in the industry. He has shown his passion for vibrant community banking as Manager of Correspondent Banking (interbank relationships) at a large regional bank, as a member of the American Bankers Association Community Banking Executive Committee, president of a dynamic community bank for 18 years, and past president of the Connecticut Bankers Association. John holds a B.A. in Economics from Columbia College and an M.B.A. in Banking from the Columbia University Graduate School of Business. He has served as an adjunct faculty member at the University of Hartford, University of Rhode Island and Quinnipiac University.

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Contacts:

Kirk Carr, Advanced Business Checking Solutions
860-828-2058
[email protected]

Joel Samberg, Public Relations
860-321-7490
[email protected]