Re: "The Community Bank Is No Spotted Owl," April 26
It was interesting, as a community banker, to read Mr. Kahr's (a big banker) piece about community banking. To assert that community banking is not in danger, in light of a decline in number of banks from over 16,000 to about 6,500 today is an exercise in absurdity.
To further assert that more community banks have failed misses the reality that the total assets and # of locations impacted by failures of big institutions (for example, see the successor to Mr. Kahr's Providian, Washington Mutual) dwarfs those of small institutions, obviously misstates the true impact question. To then combine the massive federal support received by large institutions compared to the token support to small banks moves the comments from absurdity to being obviously self-serving.
Our federal regulators project an attitude about community banks that mirrors the attitude of big banks to their small commercial accounts. They love to talk about how much they 'care' about them and want to serve them, while developing policies, procedures and incentive systems to make it increasingly difficult to do business with them. At the ground level we (both the small business clients and community banks) interpret that contradiction as a signal that we are a nuisance that the big banks and feds would just as soon went away. So don't talk to me about how the regulatory burden is the same for small banks as large ones - there is no objective support for such a position.
The irony is that small banks do fulfill the public policy objectives (for banks) of our governments by actively lending to small business where the bulk of new job creation happens. It could also be convincingly argued that the large institutions were the source of the most egregious actions resulting in the economic tailspin of the last 3 years - which clearly does not meet our public policy objectives.
Since these points are so clearly obvious, it seems that Mr. Kahr seeks to be provocative rather than to make a legitimate point.
Chief Executive Officer
Albina Community Bancorp