Local bankers gather around Congressman Roy Blunt, second from right, to discuss how the economy is affecting their industry. (Photo by Vince Rosati)
Missouri Congressman Roy Blunt (R-7) met with members of the banking industry at Granny Shaffer's restaurant in Joplin yesterday to discuss the impact of the stalled economy on their operations. It was the eighth in a series of roundtable discussions over the past two months that Blunt scheduled to help him understand the problems faced by local communities after the anniversary of what he labeled the "so-called stimulus package" promoted by President Obama.
What the soft-spoken bankers concluded was that in order to stimulate expansion of the marketplace and consequently an increase in the labor force there had to be a decrease in the mood of uncertainty that prevailed and increased incentives to bring private capital back in.
Fear of uncertainty in the marketplace was the main reason unanimously offered for why qualified borrowers are not using their lines of credit or taking out new loans to expand their businesses. Entrepreneurs, bankers say, are refusing to invest their life savings in expansion, faced with the possibility of increased taxes and utility bills and how their bottom lines would be affected by changes in administering healthcare.
Blunt, who said the real business of doing business was in the creation of jobs, explained that Washington was sending mixed messages to achieve that desired end: in one instance wanting banks to expand credit but in the other by the regulatory commission setting rules for banks demanding they cut their loan portfolios.
Everyone agreed that business expansion is driven by a "consumer engine." Without job creation no change would be seen.
The bankers, all representing small community banks, agreed that an emphasis should be on private enterprise and less government. They emphasized that smaller banks have more repurcussions than big banks from regulators who are pushing the same rules for everyone.
A discussion about making rural real estate loans, that are prevalent in the area, centered around the difficulty in making accurate appraisals of the properties. Not much activity across the state was seen by in-house appraisors as making comping difficult. House sale comparisons also were influenced by short sales that created a continuing downward spiral in house values.
When Blunt asked about borrowers who have outstanding loans that are higher than the value of the real estate, the bankers agreed that they didn't want to own their properties but work with them as much as possible. However, also in agreement was that banks can't move bad loans like they used to.
To Blunt's comment that he had learned from Springfield, MO bankers that they were concerned over competition from government loan agencies like HUD and the Farm Bureau's credit agency, no one offered a similar concern other than that HUD-setting rules were part of the regulatory change.
All bankers were in agreement that the level of FDIC insurance on bank deposits should remain the same--Blunt favored the increase to keep money in banks rather than under mattresses. Bankers did gripe over the lack of public perception that the FDIC was just a mutual insurance company and that the banks had to pay premiums for the insurance, a requirement that, according to one banker, "sucks money out."
Final words from a depositor's perspective
Last words to this reporter were made by Clive Veri of Commerce Bank and Ann Hall of First State Bank. While Veri reminded me that "being in an insured depository was the safest place to be, Hall added that the "principal was not going away."
I still wondered with the ever diminishing interest rates the banks were paying customers and the high fees that were being devised--in one case I found even for deposit slips--whether a depositor isn't already paying for the privilege of keeping his or her money in the bank's care.
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