Comments on: Those infuriating community banks A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: thruth Fri, 14 Aug 2009 18:04:41 +0000 I think the bigger puzzle is why investors are pricing securitized SBA stuff as if they and not taxpayers were on the hook for losses. (i.e. why does SBA securitization need TALF support)

By: Adam Fri, 14 Aug 2009 14:59:29 +0000 So if we want to encourage business lenders to make loans to small business but the lenders think the underwriting costs are too high, why don’t we subsidize the underwriting?

By: Griff Thu, 13 Aug 2009 22:41:27 +0000 The job of a loan officer is to write good quality loans…not just loans to make us all feel good. What is the point of the prior two years if the lesson is quickly forgotten ?

That lesson: trust a distant lender on Wall Street, not the best idea. Trust a local lender who will know his local economy, much better idea.

Don adds an excellent point…the rules (regulatory, non-regulatory) continue to shift.

By: Don the libertarian Democrat Thu, 13 Aug 2009 21:21:11 +0000 “They’ve forgotten how to underwrite loans, and now they’re scared to lend to small businesses, lest the SBA find out that their underwriting was a chimera all along.”

I see this a little differently. The bankers are shell shocked. The govt guarantees, unfortunately, have been irregular in this crisis, to say the least. We’ve been in Debt-Deflation. This requires a higher escape velocity than under normal recessions. In fact, this shows why Debt-Deflation is so awful: It requires a huge nudge, more like a shove, to get people back to even prudent investing as opposed to panicked investing.

The smaller banks are worried about fees for insurance, the fact that they’re not TBTF, and whether or not we’re really in recovery mode. It’s not that they’ve forgotten how to do things. It’s more likely that they’re still afraid.

If you see our crisis through the lens of Debt-Deflation, then this lingering fear makes perfect sense. That’s why we’re not in the clear yet.

By: Thomas Esmond Knox Thu, 13 Aug 2009 21:06:10 +0000 The banks have the choice between writing relatively profitable and relatively unprofitable loans.

They choose profitable; you would choose unprofitable.

Stick to journalism.