“What goes up can come down, but what goes down can come up again,” John Buran said with a knowing smile. The banking industry “is a cyclical business and sometimes it gets overheated,” he added.
Despite the rough and tumble economy of late, Buran, the President, CEO and Director of Flushing Savings bank is optimistic. “We’ve started to see good signs on the horizon,” he said, pointing to a recent decline in gas prices and the softening of European economies.
Buran, a 30-year banking industry veteran, is confident - confident of an upturn in financial markets and confident in his bank. And he has reason.
In the wake of the Great Depression, the United States government created the Federal Deposit Insurance Corporation (FDIC) to guarantee deposits held by commercial banks. The FDIC only insures up to $100,000 in an account, so historically some customers have had to get creative to ensure all of their money is insured - devising innovative title structures and opening accounts under a spouse’s name in addition to creating joint accounts and depositing money in multiple banks.
But that was before CDARS entered into the picture. The Certificate of Deposit Account Registry Service, recently implemented by Flushing Savings Bank, is a product that allows banks to provide up to $50 million of FDIC coverage to individual clients. CDARS is funded entirely by member banks and rates are established from time to time, just like for traditional certificates of deposit (CDs), Buran explained.
“In the current fiscal climate, more and more banks are looking into providing CDARS,” Buran said, noting that Flushing Savings isn’t alone in providing the service.
However, CDARS has augmented the FDIC coverage that Flushing Savings Bank already provides its clients, thereby expanding on what Buran views as the bank’s unparalleled trifecta of “rates, convenience and service.”
“Customers are well served by the banking system in general. It’s like any other business; people have needs and we at Flushing Savings Bank certainly have the products to serve them,” Buran said.
With the implementation of CDARS, it is evident that Flushing Savings Bank also has the means to protect its customers, a strong asset in a fiscal environment marked by the collapse of economic heavyweights like the Independent National Mortgage Corporation (IndyMac), one of the largest mortgage originators in the U.S.
“We saw a spike in CDARS when IndyMac ran into problems a few weeks back,” Buran said, highlighting the wealth of miscommunication and misperceptions that emerged in the wake of the corporation’s downfall.
“You want to allay their fears,” he said of Flushing Savings Bank’s customers, “but you also have the ability to provide them with virtually unlimited FDIC insurance,” which should enable customers to rest assured their money is safe.
In current times, the mere mention of the word “economy” is often enough to induce a chill running down the spine. But neighborhood banks like Buran’s, which has 14 locations in New York City and Long Island, have largely managed to remain above the fray. Buran pointed to the stock of Flushing Financial Corporation, Flushing Savings Bank’s parent holding company, which is consistently up eight to 20 percent. First quarter earnings for fiscal year 2008 exceeded expectations and second quarter results were in line, he said.
For the most part, Buran asserted, “Community banks have not gotten involved in risky areas like exotic investments and real estate outside of the New York area.” And it is Flushing Savings Bank’s community ties that make the bank a desirable place for customers in the first place.
“As a neighborhood bank,” Buran explained, “we want to lend in the neighborhood with neighorhood customers. We tend to stay close to the community.” In addition to the Asian Banking Center it opened last year in Flushing, Flushing Savings Bank has employees that speak 35 different languages and dialects working at the 13 other branch locations in Queens, Brooklyn, Nassau County and Manhattan. Throughout the year, bank employees conduct education seminars and workshops at the different branches and organize on-site visits to businesses and groups to inform the sectors about the different options they have at Flushing Savings Bank.
While the bank’s small number of branches was at one point in time limiting, it’s size has become an advantage in the age of the Internet and remote banking. It’s not important to have a branch near your home or office, Buran said, adding that Flushing Savings Bank has clients as far away as Florida and California.
In 2006, the bank launched iGObanking.com, offering customers access to top-of-the market iGOsavings account rates, with no fees and no minimums attached and high rates on CD accounts. At the end of last year, iGObanking.com had already amassed $133 million in deposits and it is currently the bank’s fourth largest branch. The online entity is continually listed among the top ten savings rates across the nation.
“It’s a very different environment,” Buran said, smiling as he reflected back on his long career in the industry. “The technologies that are available are becoming easier and easier to use.”
The bank’s Remote Deposit Capture (RDC) system, a “Point-Click-Scan” electronic banking tool, enables customers to scan and deposit their checks right from their office desktop. Soon, Buran hopes to unveil RDC for use in the home. In addition, the bank’s lockbox service enables business customers to enhance their cash flow by processing their incoming payments from a central postal location, which allows the funds to be electronically credited to their business checking account.
While Buran and his staff are excited about the future of electronic and online banking - “Online banking will continue to change rapidly, especially once the credit crisis subsides,” he said - Buran explained that Flushing Savings Bank’s brick and mortar locations are here to stay.
“Some people just like to look somebody in the eye and feel comfortable and have a more personal relationship,” he said, underscoring Flushing Savings Bank’s commitment to supreme service and its “very fair approach.”
“We have some very good people working for us and we train them well,” Buran said, noting that Flushing Savings Bank’s highly knowledgeable and accommodating staff has enabled the bank to adapt well to the changing ethnicity of the New York market.
“It’s no cookie cutter operation,” he said. “It’s an exciting business and it can be very challenging with a lot of moving parts. There’s the overarching challenge of regulation and how to manage the business in a highly regulated environment.”
Those regulations however, are what enable Flushing Savings Bank to stay at the top, while offering customers the security and protection they and their families need, troubled economy or not.
“The banking industry is a fascinating business,” said Buran, exuding his passion for the trade he has flourished in for over three decades.
“It really is the bedrock of the economy.”
But just how strong is that bedrock?
“It’s being knocked around a little, but the basic structure allows it to survive through these tough periods.” Added to that underlying resilience, CDARS and the FDIC provide an invaluable measure of security that Flushing Savings Bank and its clients can rely on, plowing forward into the 21st Century.
