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AT THE FOREFRONT

BEING A PIONEER IN MILITARY BANKING by LTC (R) John Herko
Introduction. This is my story. To me, it’s an exciting story about being a pioneer in
military banking after the Department of the Treasury (Treasury) transferred
operations and funding to the Department of Defense (DoD) effective in fiscal year
1978. The Military Departments begin to take control, and provide the funding, for
military banking facilities (MBFs) at their posts, installations and activities. The Army
established its military banking officer program at that time to help oversee banks and
credit unions on Army installations and to build a cadre of military personnel trained
in banking operations. Although my story starts in 1982, MBFs were identified as an
urgent need of the War Department in 1942, with operations and funding controlled
by the Treasury. This article, the first of three parts, discusses military banking starting

in 1942, the opportunity to participate in the first Training with Industry (TWI) program
in banking in 1981, and picking up the mantal as “the Army Banker.” Part 2 focuses
on two significant cash management initiatives during my assignment: (1) the government travel card
program that began a bright idea in 1980, mandated by Congress in 1988, and continues to be a
requirement for those who travel; and (2) the Army’s travelers check program offering military finance
offices travelers checks as a means of payment in lieu of cash or Treasury checks. Although the travelers

check program only lasted about 10 years, over $1 billion worth were issued the unique profit sharing
under the contract required Bank of America to rebate part of its profits back to the Army. Part 3 continues
with a cash management initiative designed to facilitate soldier pay via automated teller machines, hand-
print geometry biometrics for access, and many opportunities for fellow finance officers to joke, kid and
mock my efforts.

John Herko, Lieutenant Colonel, USA, Retired, holds the CPA (Retired), CDFM-A
and CGFM credentials. He has a bachelor’s degree in accounting from West Virginia
University (after serving as a military pay clerk in Germany and Vietnam) and a
Master of Business Administration degree from Indiana University. Following retirement,
John worked six years in the First Hawaiian Bank in Honolulu. Since 2001 he has
continued teaching government employees and contractors appropriations law, internal

control, and Certified Government Financial Manager courses for AGA (formerly known
as the Association of Government Accountants).

Genesis of the Army Banking Officer Position

Part 1
TWI Program

After attending the Finance Officer Advanced Course in March 1981, I reported to Merchants National Bank
& Trust Co. (“Merchants Bank)”, Indianapolis, IN, to begin an Army newly approved, one-year TWI program

in banking. Piggybacking on Merchants Bank’s existing bank intern training program, the Army and
Merchants Bank tailored the training to allow several additional opportunities to receive training outside the
bank.

There’s no better place to learn about customer service and bank products than working as a bank teller in
a branch bank’s location? After that, I spent the remainder of my training in a succession of assignments in

various departments of the bank and learn about domestic and international products and operations. A few
of my more memorable experiences include becoming acquainted with the bank’s mainframe computer
operations, loan and debt collection procedures (and accompanying asset collection operations), and check

processing and clearing through the Federal Reserve’s Automated Clearing House (ACH) network. (That
included spending at night on a graveyard shift for that experience.) Finally, I rotated to Merchant Bank’s
international banking office to become familiar with buying and selling foreign currency and the processes
for commercial letters of credit that support commercial import and export activities.

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