November 8, 2001, Thursday

SECTION: COMMUNITY BANKING; Pg. 8

Social Security High on New ACB Head's Agenda

The new chairman of America's Community Bankers wants its members to spread the word to consumers about the benefits of Social Security privatization.

Curt Hage, the chairman and chief executive officer of Home Federal Bank in Sioux Falls, S.D., said it is up to bankers to keep the issue alive. Privatization, once high on the Bush administration's agenda, has taken a back seat to more pressing matters, he said.

"With a war on his hands, and an economic downturn, the President may not want to be out in front of advocating privatization of Social Security," Mr. Hage said in a speech Wednesday at the trade group's annual convention in New Orleans. "That is all the more reason for (America's Community Bankers) to have the courage to take a leading role" in promoting it, he said.

Many experts say that the Social Security trust fund will be insolvent within the next three decades unless taxes are raised or benefits slashed. Though support for privatization is hardly universal, President Bush, backed by the financial services industry, has advocated the idea of allowing taxpayers to invest a portion of their Social Security dollars in mutual funds, certificates of deposit, or other instruments.

The President's Social Security Commission is expected to issue its recommendations on privatization next month, but Mr. Hage said the report would probably be shelved because "the timing is bad."

At some point, though, the debate will be taken up again, said Mr. Hage, who is calling on bankers to help prime the public for it. "We should be advocates and educators in our own communities, because this will never happen until the American people understand the benefits and demand the choice."

Mr. Hage, 55, was elected the chairman of America's Community Bankers on Wednesday, the last day of the group's four-day conference. He succeeded David A. Bochnowski, the chairman and CEO of Peoples Bank in Munster, Ind.

A native of North Dakota, Mr. Hage joined Home Federal in 1968 as a computer programmer. Except for nine months in 1970, when he tried farming, he has been with the bank ever since. During the mid- and late 1980s, he was put in charge of integrating four banks that Home Federal acquired, and in 1991 he became its president and CEO.

Mr. Hage stepped down as the president of the $750 million-asset bank last month but remains its chairman and CEO.

In his speech Wednesday, Mr. Hage outlined his agenda for his one-year term as ACB's chairman. The group will continue to lobby the Senate to include a provision in its economic stimulus package that would allow banks to pay interest on business checking accounts, he said. (The House has already approved such a bill.)

Other priorities include merging the Bank Insurance and Savings Association Insurance funds and preserving the mutual charter.

Mainly, though, Mr. Hage urged ACB members to become more politically active. He encouraged them to contact members of Congress directly, to join committees and task forces, and to become leaders in their communities in promoting "economic literacy" of all kinds.

"There is a huge deficiency in what individuals and families need to know about saving, the ravages of even moderate inflation over a long retirement, and about credit and debt management," he said. "It is to our benefit to help educate the public, because an educated customer is a better customer."