Editorials

<< Previous   of   Next >>   ADVERTISEMENT   HAVE YOUR SAY Feel strongly about something? Share it with the community by writing a letter to the editor. You’ll need to include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 250 words or less, we won’t ask you to shorten it. If your letter is published, please wait 30 days before submitting another. Send it to: E-mail: letters@heraldnet.com Mail: Letters section The Herald P.O. Box 930 Everett, WA 98206 Fax: 425-339-3458 Have a question about letters? Contact Carol MacPherson (cmacpherson@heraldnet.com or 425-339-3472).   Published: Tuesday, November 10, 2009 REGULATION Give local banks a chance No one wants to see a repeat of the excesses that caused the current financial crisis. Irresponsible risks, fueled by greed and enabled by an anything-goes attitude on the part of regulators, must never again become a way of life on Wall Street. At the same time, there is danger in applying overly tough new standards across the board, especially to community banks. A failure to regulate reckless behavior on Wall Street doesn’t call for an overzealous response aimed at Main Street. Each institution is different — huge Wall Street investment banks, for example, bear little similarity to the many community banks that fuel small business growth and, in turn, local economies. And each of those has a different mix of assets and challenges. Yet a one-size-fits-all approach is being prescribed by some regulators, according to local bankers, who have Gov. Chris Gregoire among those pleading their case. The frequent results are too-stringent directives that keep smaller, local banks from making responsible loans that are the life-blood of every town’s economy. Regulators need to take a step back and apply common sense. That’s the message that should be sent by their bosses, who run the various financial regulatory agencies of the federal government. In Washington, D.C., last week, Gregoire and a delegation of state business leaders reminded congressional and Obama administration officials that community banks didn’t trigger the financial crisis we’re in, but they’re suffering a disproportionate share of the consequences. Because of that, so are the communities they serve. We’re not saying examiners should ignore principles of safety and soundness. Of the nearly 100 community banks that have failed nationwide this year, most probably deserved their fate. But losing community banks unnecessarily makes for a less competitive local-lending market, which hurts the No. 1 job creators: small businesses. Affordable credit is the key ingredient to a strong, sustainable regional recovery. Without it, we won’t dig ourselves out of this hole. Congress and the administration understand that, and have issued repeated calls for banks to loosen the reins and stimulate the economy by making loans. It makes little sense for government regulators in the field to block them from doing so by setting unreasonable standards. Regulators need to be measured, applying reasonable standards on a case-by-case basis. Forcing community banks to make capital calls on borrowers for whom a little forbearance could mean eventually paying the loan in full is an example of a short-sighted, ultimately self-defeating approach. Let growth happen by letting community banks serve their communities. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Lakewood police officers killed today are identified 2. Four die in car crash near Marysville 3. Extended lack of work takes its toll on Snohomish County families 4. Prosecutor leaving county job, but still seeking justice 5. Advice if you’re trying to swoop in on a foreclosure deal 6. Public clinics in Everett, Lynnwood to offer free flu shots 7. GPS-equipped phones change market 8. Hero guitar 9. Six Lake Stevens friends earn Scouting's highest honor 10. Fire destroys indoor paintball arena in Everett 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Ruling in the pool • Holiday Lightings & Santa Sightings • Archbishop Murphy takes title • A season of performing arts • Budget numbers have official fuming • Wildcats move on to 2A semifinals • Holiday Bazaars & Fairs Calendar • Edmonds’ Westgate Chapel serves up hospitality for holiday • Mavericks fall • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million