Time for Community Bankers to Step Up and Shine for Your Community!
Where is our banker? It is a timely question. Let me take you to another time that might provide some direction.
The year was 1973, I was young and green and Marvin Carlile (former Banker of the Year) and founder of many West Texas banks called me into his office, in Tulia. I had graduated from college and worked at Merrill Lynch, but knew nothing about banking. Willard Payne, President of Bank of the West, in Lubbock had gotten me together with Mr. Carlile, and said:
"He is a banker's banker. Never was and never will be another like him. He has trained 12 boys like you, who are now Presidents of banks across Texas, and even in Washington D.C. Watch him and do what he says and you can be a great banker." Willard told me. So I went to Tulia, to become a banker. Mr. Carlile gave me a car, a secretary, an office and an expense allowance, but never a written job description. After a couple of weeks, I got bored and went into his office.
"Mr. Carlile, I am most thankful for this job. But, I don't have a job description. What am I supposed to do? What do you want me to do?" I said.
"He smiled and sat back in his leather chair and said: "Take care of my people."
"What?" I said.
"TAKE CARE OF THE COMMUNITY, THE PEOPLE. THAT IS THE DUTY OF A BANKER"he grunted, and turned around and went back to work.
I really was lost. I went back to my office, sat a while, and got a stack of bank leaflets and started walking around the town square of Tulia. It was then that I learned something about what a banker was supposed to do.
In T.A. Hayworth's office supply store, I walked in, and said; "Mr. Hayworth, is there anything the bank can do for you?" He glanced at up and down like the "green" city kid that I wasand said: "When I went nearly broke and had a health failure, the bank took care of me, and carried me for a year and a half, until I got back on my feet. I wouldn't be here but for Mr. Carlile. What you can do, is try your best to be a banker like him."
In H.M. Baggerly's newspaper office, The Tulia Herald, I said: "Mr. Baggerly, what can the bank do for you." He glanced at me with a knowing smile and said: Mr. Boothe, let me tell you a story: "Once all the store owners got mad and a preacher came after me for an editorial I wrote about the kids driving their cars around the square, and making out in the back seat.The mother's were embarrassed and the fathers started a "strike" onmy paper. They all stopped advertising with me. I was in financial trouble, when Mr. Carlile sent a message that he wanted to buy all of the advertising space available for the bank. That broke the 'strike', saved my business, and kept a newspaper in Tulia. I would do anything for your bank, and owe him my very existence here"
Mr. Crawford, a retired farmer told me. "When I had a heart attack, I called the bank, to get me to the hospital. I didn't know if I could count on an ambulance, but Mr. Carlile had told me that I could count on him and the bank."
Maude Hill, a widow said: "Your boss, Mr. Carlile had my lawn mowed, had food cooked and deliveredto my home, took care of my husband's estate, and kept me alive for nearly 6 months, until I got through that grief and loss."
Rex Rogers of the old Rogers Ranch told me: "During the depression we had no money, we were going under. Mr. Carlile said we could withdraw $1 per day, and he would back it up with his pocket book if we needed it. But he promised, he would keep our town going, and keep us going, until we got through it."
Waymon Featherston, a John Deere dealer for years said; "When the depression took all the money out of circulation, Mr. Carlile kept lending to me and the farmers. He kept lending even in the worst of it, so the crops would be planted and harvested. He carried some of them for 5 years, until they finally had rains and made good crops. There isn't a family in Swisher County that can't tell a story of how he was there for them when THEY needed it."
Billy Jenkins, a retired bank examiner told me. "We came in and started to criticize Marvin Carlile's loans, those he made to people year after year, during the hard times. He stopped us and said:
'Mr. Jones, a bank has a fiduciary responsibility to the community. A bank is a public trust. You and I wouldn't have a job, if we fail to take care of these people when they need us. So, you criticize, if you wish, but if you write off all of these loans, you won't have a bank or a town here."
Then he picked up the phone and called Washington,because the head man of the Bank Regulatory office, got his training from Marvin Carlile. The examiners generally respected and listened to Mr. Carlile, because he was knowledgeable, wise and generally right. They knew he had the courage to fight for "his people" even if he had to take it to the top.
Those were the things I learned about banking from Marvin Carlile in Tulia, Texas.
NOW IS THE TIME FOR BANKERS TO SHINE! THE AMERICAN PEOPLE NEED YOU NOW.
FOUR WAYS THAT YOU CAN SHINE.
1. LOANS TO SMALL BUSINESS, SBA LOANS
Economists tell us that small business creates 85% of all jobs. They also tell us that the jobless rate is the biggest problem in the current recession. Now the Obama Administration has funded the SBA with more funds than ever, and expanded a "small business loan" to as much as $5,000,000.
Plus the government will guaranty most of the loan so that the bank can make the profit but have no risk.There wasn't an SBA loan program during the great depression, and this is a tool where the banks can "shine" for their communities.
It could lead the way to economic rebound for thousands of towns and millions of people.
When the great crash hit, bankers like Marvin Carlile were there for the people. Bankers today have the tool, through SBA to help the community, and do so profitably with almost no risk.
2. CREATE A DEPARTMENT FOR RENEWABLE ENERGY LOANS
The handful of banks that have started making loans for renewable energy (wind turbines, solar PV, solar water heating, conservation tools) report that this is their most profitable and fastest growing section. An energy firm, Environmental-Solutions (http://www.environment-solutions.com) documented this example why:
A customer buys a $1,000,000 wind and solar power system for his farm, company, or business. The bank lends $800,000 through an "energy loan" (which gives the bank good points with CRA). The Federal Government gives the customer 30% ($300,000) back in cash as an incentive grant, which can be applied to the loan, leaving the bank with an exposure of only $500,000 on collateral worth $1,000,000. The system, saves $280,000 per year in energy cost, increasing the customer's cash flow, and providing more than enough money to pay the loan balance back in 2 years. Plus there is a side effect. Valuation specialist verify that renewable energy equipment will increase the property value by a factor of 1.4 to 1.8, thus the collateral actually increases in value. (see article in:http://www.bootheglobalperspectives.com)
Furthermore appraisers confirm the increase in value as well: (http://www.benboothe.com)
This renewable energy loan department does several things for the bank and the community:
* The bank finds a new profit base
* The bank is given favorable response by regulators for doing more for CRA compliance
* This creates new jobs, and new economic activity in the community
* It saves electric and energy bills
* It increases cash flow and profits for the bank, and for the bank customer
* It helps the environment and the nation to achieve energy independence goals.
3. Encourage your customers to get out of the ACH system. Get out of the Credit Card system trap!
The ACH system was designed so that giant credit card companies could quickly process credit and debit and transfer funds to and from checking accounts. Did you know that an ACH transfer can ACH transaction can remove money from your checking account without prior notice and even overdraw a closed account of a deceased person, making the bank responsible for either collecting the funds, or eating the loss.
The entire credit card system is having a tidal wave of fraud cases, so many (over 200,000 per year) that regulators and law enforcement agencies can't begin to keep up with, research or prosecute. It is time to opt out of the credit card system. Largely unregulated the system invites abuse. My banker said: "the system charges people 29% if their credit score dips, and begins the domino effect to ruin. It is an evil system".
4. DEHUMANIZATION: One of the Biggest Issues At Modern Banks
Banks, especially giant ones, have dehumanized, disrespected, bulked, pooled, and "policied" the human individual, almost out of the equation. I was asked to go to Chaser Bank (name changed to protect the innocent) with a lady. She had little bank experience, but had $200,000 in that bank. She wanted to buy a rent house, fix it up, and make it investment property. She needed to pay $90,000, for the house (which appraised at $98,000 and was willing to put $20,000 down and then spend another $20,000 remodeling it. Chaser Bank's 29 year old loan officer could hardly look up from her policy manual when she said:
"No way. You may have $200,000 in the bank, but you do not qualify for a loan at Chaser."
In the same lobby was a poor couple who just got their loan approved for a mortgage, that was put in a pool structured with CDC's (credit default certificates), the very same system that caused the financial crash that we now suffer from. They qualified,because the "system" is structured to exploit and profit from them, while it overcharges floating rates that can be ruinous to them. Since the crash, the financial system has made few foundation changes. Indeed there are more CDC's ($286 Billion the last I checked) outstanding today in 2010, than there were when Wall Street Crashed near the end of the Bush Administration.
Consumer loans with many of the giant banks, are made based upon a secret "credit algorithm" therefore bank loans areoften decided, based on an outside computer calculation that even bankers do not understand. They call ityour "Credit Score". We interviewed 12 bankers and not one could tell me how the credit score was derived. Thus the personal quality of integrity, character, or personal needs of the customer and the community is often lost. The "computer" did it. (The banker is thus absolved, not his fault, it is the credit score's fault, even your fault)
Bankers often put a policy manual ahead of a "people", because of examiner or lawyer pressures. We need hand's on bankers who deal with humans with respect.
The banker should be "in there with you" not allowing some "system" to dictate your future from a mountain peak.
Banker's should learn the lesson that Mr. Carlile taught me."Go out and take care of my people" he said. Get involved in their lives, their social needs, the community.
A few years ago a bank 40 miles south of Ft.Worth/Dallas got into a capital bind.They were in a cyclical recession and losses had reduced the capital to the point where it was about to fail. The banker was honest with the people of town. "if you want a bank, we all need to chip in and try to save it." The towns people all did just that, and they gave the bank enough capital to survive. Respect and human honesty on the part of the banker, brought support and loyalty from "his people".
Now 15 years later, the bank and the town are thriving! Mutual respect. The human equation. It can be very profitable. Marvin Carlile knew that. Modern banks seem to have forgotten. It is contrasted with a system that says: "Your credit score which has been artificially created by a computer in California has reduced your credit score so now you cannot achieve your potential because this bank abides by what that computer tells us." That is not banking. That is mass production of numbers to achieve pure greed by a computer that really doesn't give a *^%#.Some has said that "Citi" bank should go back to the big city. Remember...."Banking is a public trust, banks have a fiduciary responsibility to their communities."
SOURCES AND DATA:
Global Perspectives: (http://www.bootheglobalperspectives.com) Economic, Banking, Political Trends, VIP Insights, Energy Trends.
Boothe and Associates Appraisals & Bank Consulting: (http://www.benboothe.com)
Ben B. Boothe is the Publisher and Editor of GLOBAL PERSPECTIVES and has a "family" of contributing writers from 7 nations. If you have a timely and interesting subject, submit it. This publication enjoys thousands of readers from 20+ nations.
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