Small Banks Fail in Big Numbers


	Small Banks Fail in Big Numbers

disenchantedcitizen

8-21-2009 9:11 AM

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tags:

banking, economy, faith in government, survival

disenchantedcitizen says:

Closures and government takeovers of failing banks have become so routine that they barely gets noticed each Friday when the FDIC makes its announcements.

While the banking crisis began with escalating defaults and foreclosures on home mortgages, the increase of bank failures in recent weeks has been driven by rising losses on commercial real estate loans, which are starting to default in large numbers. Community and regional banks hold a disproportionate share of commercial real estate and construction loans.

My sister-in-law works at a local bank and says they are only accepting signature loan applications, fixed 5-yr home loans, and no car loans.

My brother-in-law sells commercial real estate and every loan he has setup this year has been denied.

My wife works for a car dealer who is losing his lines of credit after years of pristine credit.

Our home value lost $50,000 and our property taxes went up $500.

How the middle class is going to survive this mess is anyone

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/0f04851c-3032-4f1f-a95b-43df981ff9ad/D8CA81D6-76BE-4FD0-9303-392DBA9978A9/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines" href="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines" style="font-size: 11px;">www.washingtontimes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines">The Federal Deposit Insurance Corp. has closed 77 community and regional banks this year. Meanwhile, Goldman Sachs, JP Morgan and other large banks have reported robust profits, thanks in part to generous government support.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines">The disparity has raised questions about the fairness of the "too big to fail" doctrine that keeps alive big banks that took risks that helped bring about the financial crisis.
</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines">The nation's more than 8,000 small banks hold only about 20 percent of total bank assets, while a few dozen large banks hold about 80 percent.
</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines">"If you're not GMAC bank, for example, or some other government-sponsored institution, then you're really out of luck."
</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines">as 2,000 small banks ultimately will be shut down as a result of the financial crisis and recession, which were largely spawned by risky lending practices at big banks and Wall Street firms.
</blockquote><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content9.clipmarks.com/images/clip-icon.gif" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines&page=2" href="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines&page=2" style="font-size: 11px;">www.washingtontimes.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtontimes.com/news/2009/aug/21/small-banks-fail-in-big-numbers/?feat=home_headlines&page=2"><P>
The closures of small banks reduce competition and feed caution about extending new loans to consumers and small businesses.
</P></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/D8CA81D6-76BE-4FD0-9303-392DBA9978A9/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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