ABA Banking Journal - December 2009 - (Page 12) Community Banking Pass the Aspirin: What are you doing about overdraft protection plans? p. 14 Aspirin blog: www.ababj.com/blog/277.html How ya gonna keep and should you even try to? When the customer is a family farm, bankers wrestle with tougher issues than loans he veteran farmer thought it was time to call it quits, and pass the family farm to his sons. His wife had died, and, after decades of battling all the factors that farmers face, he told an advisor, “I’m sick to death of farming.” He was looking for advice and help. He and his children, two sons and two daughters, didn’t communicate all that well. He asked consultant Neil Koenig to assist him by speaking to his grown children, to sound them out about his desire to retire, and to have one of them take over the farm. Koenig met with the younger generation, and found surprises. One daughter thought the father absolutely loved farming, while the other believed he would never, ever let go of the farm. One son told Koenig, “I hate farming! I’m doing it only because of Dad. He can’t lose his wife and his farm.” The other son confessed to much the same feeling—stuck in a hated spot out of concern for the parent. Koenig then invited the four siblings and their father for an off-site meeting at a hotel, and revealed all how everyone felt. The farmer stood up, as did the elder son. “By God, then, we’ve got a deal!” he said, and for the first time in years, they hugged. Within an hour the family had engaged an appraiser. T Bankers stuck in the middle Koenig is head of Leadership R&D, Clovis, Calif., and is freBy Steve Cocheo, executive editor quently engaged by family-owned firms and farms to help them sort out questions, disputes, and even violent confrontations over succession and related issues. He told bankers at ABA’s recent National Agricultural Bankers Conference that bankers often wind up refereeing such issues by default, and much more of this will be the lot of the ag banker, Koenig predicted. “Most of the businesses that I work with have a dream of an enduring family business that will last from generation to generation,” said Koenig. But while many family farms trace their history back to pioneer days, the current and incoming generations may feel little love for farming. And that leads to a truth the bankers and families must confront, according to Koenig: by 2012, the largest transfer of wealth in American agricultural history will be hitting its stride, as family farms and agri-businesses change hands. It’s not an easy transition to make, said Koenig. “Soon, we’ll talk about the passing of the computer to the next generation,” instead of the tractor, as ag becomes more and more automated. “You’re going to get stuck in between the generations,” Koenig warned bankers. Regrettably, not all stories involving family farms and agribusiness go nearly as smoothly as did the one just told. A common problem is the onset of dementia in the older farmer. Bankers spoke of second spouses that don’t necessarily have the patriarch’s well-being at heart—in one banker’s words, “gold diggers”—who capitalize on mental deterioration. Koenig spoke of one customer who, at 83, decided to buy 30 acres of land near an Interstate junction. Among other mistakes, due to mental deterioration, was his waiver for an environment inspection prior to finalizing the purchase. The family later found itself stuck with $3.5 million in environmental cleanup costs. When the bank learns of a questionable transaction, it can face a 12 DECEMBER 2009/ABA BANKING JOURNAL Subscribe at www.ababj.com http://www.ababj.com/blog/277.html http://www.ababj.com Table of Contents for the Digital Edition of ABA Banking Journal - December 2009 ABA Banking Journal - December 2009 Contents Editor's Column Briefing ABA Resources ABA Chairman's Position Community Banking Pass the Aspirin CRE Pain Fraud Looms Large on BSA Menu Tech Topics Compliance Clinic Mailbox The Economy ABA Banking Journal - December 2009 ABA Banking Journal - December 2009 - ABA Banking Journal - December 2009 (Page Cover1) ABA Banking Journal - December 2009 - ABA Banking Journal - December 2009 (Page Cover2) ABA Banking Journal - December 2009 - Contents (Page 1) ABA Banking Journal - December 2009 - Editor's Column (Page 2) ABA Banking Journal - December 2009 - Editor's Column (Page 3) ABA Banking Journal - December 2009 - Editor's Column (Page 4) ABA Banking Journal - December 2009 - Briefing (Page 5) ABA Banking Journal - December 2009 - Briefing (Page 6) ABA Banking Journal - December 2009 - Briefing (Page 7) ABA Banking Journal - December 2009 - Briefing (Page 8) ABA Banking Journal - December 2009 - ABA Resources (Page 9) ABA Banking Journal - December 2009 - ABA Chairman's Position (Page 10) ABA Banking Journal - December 2009 - ABA Chairman's Position (Page 11) ABA Banking Journal - December 2009 - Community Banking (Page 12) ABA Banking Journal - December 2009 - Community Banking (Page 13) ABA Banking Journal - December 2009 - Pass the Aspirin (Page 14) ABA Banking Journal - December 2009 - Pass the Aspirin (Page 15) ABA Banking Journal - December 2009 - CRE Pain (Page 16) ABA Banking Journal - December 2009 - CRE Pain (Page 17) ABA Banking Journal - December 2009 - CRE Pain (Page 18) ABA Banking Journal - December 2009 - CRE Pain (Page 19) ABA Banking Journal - December 2009 - CRE Pain (Page 20) ABA Banking Journal - December 2009 - CRE Pain (Page 21) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 22) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 23) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 24) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 25) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 26) ABA Banking Journal - December 2009 - Fraud Looms Large on BSA Menu (Page 27) ABA Banking Journal - December 2009 - Tech Topics (Page 28) ABA Banking Journal - December 2009 - Tech Topics (Page 29) ABA Banking Journal - December 2009 - Tech Topics (Page 30) ABA Banking Journal - December 2009 - Tech Topics (Page 31) ABA Banking Journal - December 2009 - Compliance Clinic (Page 32) ABA Banking Journal - December 2009 - Compliance Clinic (Page 33) ABA Banking Journal - December 2009 - Mailbox (Page 34) ABA Banking Journal - December 2009 - Mailbox (Page 35) ABA Banking Journal - December 2009 - The Economy (Page 36) ABA Banking Journal - December 2009 - The Economy (Page Cover3) ABA Banking Journal - December 2009 - 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