CHANGES IN BANKING ARE NOTED BY FED STUDY

The banking industry, particularly from the perspective of depositors and borrowers, has changed significantly just in the last 15 years. The growth of multibank ownership and interstate banking -- both were widely prohibited until just a few years ago -- has been accompanies by tremendous technological changes in the way we handle our money.

Twenty-five years ago, credit cards were getting firmly established as the coin of the realm. Banks started charging depositors for writing checks. And remember the counter checks, those blank forms where you filled in the name of the bank and wrote a check for whatever you were purchasing?

Automated teller machines, or ATMs, came along, and blinking video screens replaced much of the contact banking customers used to have with tellers. Now banks find more and more ways to encourage customers to use debit cards and ATMs. Incentive range from various fees to free pizza if you use your debit card often enough.

Perhaps one of the biggest changes that is obvious to almost everyone is the near-disappearance of small-town community banks where everybody knew the bank president by name. In the early 1970s, Idaho was one of the first states to permit statewide banking, and every bank in the state was owned by one of three bank-holding companies -- except for the bank in tiny Troy, Idaho, where Frank Brocke knew all of his customers by name, corresponded with depositors all over the world and even made a auto loan to a man who had been convicted of robbing his bank a few years earlier. When the man was paroled, he needed a job. And his job required a car. So he went to Mr. Brocke and asked for the loan. Frank thought it was better to have the fellow employed than robbing banks.

The Federal Reserve Bank in St. Louis recently released its most current study of community banking in the states it serves. The Fed categorizes banks with less than $300 million in assets and not owned by a large banking corporation as community banks.

The study showed that Missouri has lost 50 percent of its community banks in the past 15 years, the second highest rate of loss in the seven-state area. Only Indiana, which lost 63 percent of its small banks, was higher.

The Fed's report made no attempt to evaluate the impact on customers. Quite frankly, many individuals prefer to bank with an institution that has branches all over the nation with ATMs that are accessible just about anywhere you go. Others still prefer to deal with someone like Mr. Brocke.

And in the Cape Girardeau area, there has been a resurgence in small banks in the past few years. The Fed said community banks serve an important financial niche in one key respect: They tend to be more accessible when startup and business-expansion loans are sought.