Click the Picture to Play the Rant
I received the forward of an email yesterday from the director of a local chamber of commerce that was sent to their members to no longer use certain banks. It read:
“Please remove from your community guides and business directories the following former members:
Bank of America, Chase Bank, Fifth Third Bank
We hope that these institutions that do business in our communities realize that small business makes up the majority of this country and the majority of their clients. Small businesses are our nation’s number one job creators. Fully 99 percent of all independent enterprises in this country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA).
We urge you to continue to use these fine local member banks:
Amcore Bank, American Chartered Bank, MB Financial Bank, Midwest Bank and Trust, First Bank, First Chicago Bank & Trust, Harris Bank, Parkway Bank & Trust, Ravenswood Bank”
Why the anger?
Even before this crisis, there has always been a very tenuous relationship between small business and their bankers. Small business owners have never felt that banks gave money when they really needed it. Bankers tried to explain to small business owners that they lend money not give capital investments..and so it went for many years, but they needed each other.
Along comes the banking crisis of 2008, 2009…with bank failures causing the worst economic times that any of us have experienced. On top of that, we are seeing billions of dollars going into propping up the banks that are responsible for the crisis. In the meantime, all small business owners are struggling to make ends meet without a bailout. Banks are now more cautious about the credit they extend and some are also taking away existing business lines of credit. The small business owner wonders where all the money the government gave the banks went since it was suppose to free up lending?
Get the picture? Understand the anger? I see the frustration in small business owners everday. I hear the frustration from the bank employees saying it was not their fault and they feel they are being victimized.
Some banks are stepping up. Community banks are doing a great job. I am doing a video shoot next week with Wells Fargo Bank to halp small business owners.
Do you see and feel out? How would you resolve it?
[…] » Why We Now Hate Bankers, Barry Moltz […]
Nicely delivered on banks Barry. Much more to say. You’ll not lose friends on this one—so keep it coming. The first step should have been clean-outs—then bail-outs with heavy restrictions on use of money. Those individuals “cleaned out” of the system, should be sitting out terms in debtors’ prisons.
Does it really make sense for banks to keep lending and people to keep borrowing? The radio of debt to GDP is as high as it’s ever been since 1929. http://www.usgovernmentspending.com/federal_debt_chart.html
Isn’t this the problem? Too much borrowing and not enough pay-as-we-go? Isn’t now the time to earn our way out of this rather than borrow more? Many people have increased their standards of living before they could afford it through borrowing and now there is just WAY too much debt in the world: individuals, families, companies and governments. It may take years of hard work to balance out the debt to production ratio of the planet! You could say that the world’s P/E ration is way off.
I know that lending and the flow of credit is the blood that keeps the system alive, but credit has been too loose for too long. I’m not sure that banks should lend now, or at least not in the way they used to.