Safety in Banking Through the Decades

The Indiana Bankers Association has a rich history dating back to 1897. In its early years, the IBA’s focus was on getting banking structure law written into the Indiana Code. In the mid-1920s through the early 1930s, the focus switched to protection of bank funds and employees. IBA’s first full-time staff leader was Forba McDaniel. Among other accomplishments, such as launching Hoosier Banker magazine, Ms. McDaniel established the IBA bank guard program. With robberies escalating, she also started the “Today’s Protective Bulletin,” which was distributed to Indiana bankers to notify them of suspicious characters.

The bank guard program essentially consisted of vigilante groups of armed bank guards, mostly made up of bankers themselves, to protect Indiana banking institutions. In 1925 the IBA issued 886 rifles, 1,210 revolvers and 2,000 shotguns to bankers to help them protect their institutions! At the program’s peak, there were more than 3,000 deputy bank guards assigned to 1,113 IBA-member banks. From 1926 through 1942, the IBA hosted annual shoots at Fort Benjamin Harrison to thank and recognize bankers for their participation in the bank guard program.

In 1932, the foundation of what today is the Indiana State Police was formed through legislation initiated and supported by the IBA. Working for Ms. McDaniel during this time was a young man named Herman B Wells, who later went on to become long-time president and beloved chancellor of Indiana University. In addition to his academic advancements, Wells is largely credited with the formation of the Indiana State Police. He also was instrumental in getting legislation passed to form the Indiana Department of Financial Institutions; Wells served the fledging DFI as bank supervisor and as head of its research division.

Clearly it was dangerous to be a banker back in the late ’20s and early ’30s. While it is much safer today, the threat of violence still looms. I have met too many bankers during my career who were victims of robberies, sometimes with tragic consequences.

Last Thursday, Randy Peterson, president and chief executive officer of Bank of Eufaula in Oklahoma, was shot and killed during a senseless robbery. Mr. Peterson, 64 years old, had been with the bank since 1979 and was a community leader and respected family man. While most crime against banks today occurs electronically, this horrific event serves as a reminder that armed robberies still take place. The perpetrators are generally not rational and often are quite volatile. Our thoughts and prayers go out to the family and friends of Mr. Peterson and to the town and community of Eufaula.

In Indiana, we should be thankful for the vision of Forba McDaniel, Herman B Wells and the brave bankers of the 1920s and ’30s. Our state and our nation are safer for bankers today than in decades past. The efforts of pioneering banking leaders certainly have shifted the attention of bankers back to banking, rather than serving as vigilante guards. Events such as last week’s tragedy in Oklahoma, however, remind us that an element of danger continues to exist for bank employees. As leaders of the banking industry, we must never take lightly our duty to maintain proper training and precautions to safeguard at-risk bankers and customers.

– S. Joe DeHaven

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