Why Is It So Hard to Borrow Money?

Bankers have had a hard year. Yes, I know, everyone else has had a hard year, too. But when you think about community bankers, please consider a few extra lines that don't normally make it past your second thought:

• Bankers in our area really didn't cause this crisis...yet the blame is passed around evenly to Banks in our area.
• Bankers are good guys while lending you money, and bad guys when asking that it be paid back. Remember, it's a law that we have to get it paid back.
• Bailouts don't happen in your/our area, and good folks in hard times don't get bailouts like the big boys did.
• Bankers get to stress the many budget woes of their customers. When your paycheck doesn't last all month, you stress it.  Bankers have many, many customers they are helping get to the next paycheck, and the stress really adds up on us.
• Bankers have much more stress to come, even if the economy recovers and we all get back to work...
• Bankers have been making loans during the crisis, only to be scrutinized by regulators for doing so.

So why won't Bankers just re-start the loaning of money and help all of us move on with our lives?

Besides stressing current events and whether or not to loan, bankers have a big storm coming over the horizon. It's the Dodd-Frank Regulatory Reform Law.  The bill, passed earlier this year, is 2319 pages long. The ensuing bank regulations resulting from that bill will generate an estimated 20,000 pages of new bank regs! Yes, 20,000 pages! Thats about 40 reams of paper. I'm serious when I say, we bankers are reeling over this, and are hopeful the new congress will roll back or repeal some or all of this behemoth of red tape before our ability to lend is stifled even more.

What were the laws intentions? It was intended to protect you the Consumer. However, simply put, if you think borrowing money now is tough now, wait a couple years.  Bankers are waiting to see just how this new government burden will add to our overhead, and how and if some of the smaller banks will be able to afford to compete. As always the costs have to be passed on. You see only big banks are too big to fail. Traditional banks are allowed to fail every Friday if they make the wrong decisions.

Results vary just like opinions, but the end of free checking is near. Possibly the end of being able to write a check to get a prescription for a sick child, all the while knowing you don't have cash in the bank, but knowing your banker will cover it for you, because it's the right thing to do. Yes, a fee is involved, and a fee is earned. But, that fee, tonight, is the farthest from your mind. And yes, your sick one got the medicine tonight, instead of next payday. And yes,  you got to make that choice yourself, instead of the government telling you that program is not good for you or your family.

Consider this: The Government can't protect all people from all things good and bad. The many are always forced to pay for the bad judgements of the few. More red tape is never the answer, but it has been the norm lately. We need less writing and more doing. You know that privacy notice you get in the mail every year about this time from banks and credit card companies? The one you dont read? The one you round file? That cost banks millions of dollars to print and mail, complying with a regulation intended to inform you that doesnt work.

Banks need to be allowed once again to invest in their customers, their communities, without fear of government red tape putting them out of business for doing so.

I am still at work, stressing about tomorrow and next week and my budget for 2011. Then I see a customer drive by. I know their name and they know mine. Our kids played ball together. Their granny and mine are quilters together at the Senior Center. That knowledge is rare in big banks. But it's not rare here. Suddenly, it all comes back into perspective why I am still here.

D