About 25 years ago, a former cop named Bill Cooper took command of TCF Bank. He has kept Minnesota's third-largest bank independent and consistently profitable, while many local banks faded away.
Now, Cooper is planning to retire in a couple of years. That fact, combined with the possibility that TCF will lose a lot of revenue from its debit card business, has led to speculation that the bank may be sold.
For Bill Cooper, business is a game, "and money is how you keep score. I enjoy the competition the same way a lot of people enjoy tennis or golf."
Cooper is not your typical banker. He's blunt and his roots are blue collar. His father died when he was young, and his mother worked as railroad clerk. Cooper earned his accounting degree while working as a cop in Detroit. And as chairman of the Minnesota Republican Party, Cooper helped revive the GOP in the state.
Cooper isn't afraid to take on anyone, including the bank's powerful regulator, the Federal Reserve Board.
TCF sued the Fed last fall, hoping to block the board from mandating steep cuts in the fees banks charge merchants that accept debit cards.
Merchants complain the fees -- up to 1.5 percent of a transaction -- are excessive, costing them $10 billion a year.
Debit cards are a big piece of TCF's business. Cooper says the proposed Fed rule would slash TCF's debit card fee revenue by about 80 percent, or $80 million a year.
"It's a big problem for us," he said. "It's unfair, and in my judgment, unconstitutional. There's a lot of people in Congress who voted on this that subsequently said, 'Gee, I didn't really realize what I was voting on.'"
TCF says the proposed Fed rule places unconstitutional limits on banks to recover their costs, and doesn't treat all banks the same.
Cooper argues the debit card fees charged to merchants are fair, considering the increased sales and other benefits retailers get from accepting the cards. He hopes to defeat the fee cuts in the courts or Congress.
The Fed is expected to finalize the change by late April. TCF says the proposed fee cuts could push its profits well under the industry average, and make its future uncertain.
Industry observers say the debit fee cuts, if they take effect as proposed, could drive down TCF's profits -- and with them the stock price. Banking consultant Bert Ely says with a depressed stock price, TCF may not survive as an independent bank.
"It may make TCF a more attractive acquisition target," he said.
Part of TCF's problem is that as far as banks go, it's big -- but not huge. It's one of about 100 large banks that would be subject to the fee cap. But TCF isn't big enough to easily absorb the hit.
TCF says larger banks can offset lost debit card fees, perhaps by steering customers to credit cards, which aren't subject to the fee cap. But it's not an option for TCF, because many of its customers wouldn't qualify for a credit card.
TCF adds it would almost certainly lose customers if it tried to make up the lost revenue by charging customers fees for using debit cards.
There are signs that TCF's reliably profitable business model may be sputtering. The bank said this week that a $500 minimum balance requirement was keeping many people from opening new accounts.
"We were having a harder time getting customers to sign up for new checking accounts because of the $500 minimum balance," said TCF spokesman Jason Korstange.
So the bank, once known for "free checking," relaxed its requirements. Customers no longer have to keep at least $500 to avoid a monthly $9.95 fee. Now, they can escape the fee if they deposit at least $500 a month into an account, or have at least 10 transactions on the account.
That doesn't seem to be in keeping with TCF's historic strength -- collecting lots of overdraft, ATM and other fees from customers.
The bank readily acknowledges that's a key part of its strategy and business model. It says its customers tend to keep low balances, restricting the bank's ability to make money by lending out depositors' money.
The typical TCF customer keeps only a few hundred dollars in a checking account. Every month, about 20 percent of TCF customers pay some sort of fee or service charge. For the first nine months of 2010, TCF customers paid the bank about $210 million in fees and service charges.
Jaime Peters, a banking analyst with Morningstar, says that when you factor in interest payments, most consumers earn a small return on their bank deposits.
But at TCF, "customers pay the bank between 1.5 percent and 2.5 percent a year to hold their deposits," she said. "They're not receiving money. They're paying money."
Peters says many TCF customers can't keep enough money in the bank to avoid fees.
"There are a lot of paycheck-to-paycheck customers at TCF," she said.
But they're the kind of customers a lot of banks aren't interested in serving. Cooper says if not for TCF, many of his customers wouldn't have a bank account at all.
But Peters says TCF's focus on lower-income customers could make TCF less attractive to a potential buyer.
"Some banks are going to be hesitant to go ahead and acquire a TCF because they would have to try to bring them into their corporate culture," she said. "Would that affect profitability? Probably."
Cooper plans to retire as TCF's CEO in 2013, before his 70th birthday. And some analysts think that if TCF isn't sold soon, it likely will be when Cooper leaves.
Cooper says TCF has always been open to a compelling buyout offer.
"We'll listen to anybody," he said. "We've talked to lots and lots of people over the years. It's interesting. I would say that at least 75 percent of the people that visited us subsequently went into the tank."
As far as the bank going on without him, Cooper says it may or may not. He's not sharing any predictions.