The Washington Post reports that “Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.”
Which begs the questions: With bipartisan opposition from objective experts, why should any Congressman instead believe the very same Bush officials who helped create this crisis with their deregulation? These same Bush officials who just months ago said our economy was fine? All seems well with the majority of small banks across the nation.
The industry is resilient despite the struggles of some members. Washington Mutual, a troubled Seattle savings and loan that was among the nation’s largest mortgage lenders, yesterday was seized by the government and sold to J.P. Morgan Chase.
At the same time, many smaller banks said they were actually benefiting from the problems on Wall Street. Deposits are flowing in as customers flee riskier investments, and well-qualified borrowers are lining up for loans.
The National Federation of Independent Business members only had 10% that said loans were harder to get in August. But only 2% cited that cost and credit as their number one business problem. However, this is well below the 37%; that noted credit as their biggest challenge in 1982.