As most bankers are currently under an
environment in which sales of loans are considered
"king", I thought I would take this opportunity to
share some excerpts of a letter recently sent to me by Allen
W. Sanborn, President and CEO of RMA.
The stock market has fallen dramatically,
energy prices are up and beginning to bite businesses and
consumers, and overall economic activity has declined. Indeed,
consumer confidence has been dropping for the last four
months. On January 2
,
the latest survey of purchasing agents indicated significantly
weakened economic conditions.
Clearly, a weaker economy will have an
impact on some borrowers, particularly those that have over
expanded or taken on too much debt.
Bankers and regulators alike acknowledge
that our current environment is "beginning to feel like
1990-1991." Regulators do expect problem credits to rise,
but do not yet know if they are looking at a "rat, pig,
or horse in the python, or how long the python may be,"
as one senior supervisor said during the meeting with the bank
regulators and RMA.
Banks, yes indeed, are profit-oriented
businesses. However, Mr. Sanborn’s message is clear that
balance and patience from both the industry and regulators
will be needed in this coming year.
We encourage your comments and
recommendations on this newsletter. Please contact Sandy
Gruber at 608-588-3100 for any suggestions or comments.
Sincerely,
Richard Ihlenfeldt, WI Chapter President
