Is your bank on this list?

Posted by: John Tozzi on December 30, 2008

ProPublica is keeping a running tally of banks that took TARP money (via NPR). I was surprised by how many small regional and community banks were on the list.

One community bank in New York that I interviewed in September is taking $42 million, even though Sterling Bancorp (STL) didn’t make exotic loans and said it had plenty of liquidity even as big lenders were melting down. Here’s what Sterling chairman and CEO Louis Cappelli said about taking the bailout money in a press release:

Our decision to add to Sterling’s already solid capital base reflects our commitment to maintaining a strong balance sheet. At the same time, the additional resources will enhance our ability to serve our customers and community, continue to grow our lending and other banking businesses, and expand our capacity to pursue attractive opportunities in the future.

So it sounds like Sterling is using TARP money expand a healthy operation. Many people — myself included — are still unclear about whether TARP is meant to rescue insolvent banks, further strengthen healthy banks, or both. It’s also not clear whether the bailout is actually getting credit to worthy borrowers. The Associated Press recently asked 21 banks that got at least $1 billion each in TARP funds what they were using the money for, and all 21 refused to say.

So, here are my questions for you, small business owners: Is your bank on this list? Has your banker pulled back credit? If so, what have they told you why? Are the small and mid-sized banks on this list more transparent than the big ones the AP surveyed? If your bank took TARP money, is any of it flowing down to you as loans and lines of credit?

You can tell us in comments, by email, or at our new home on Twitter.

Reader Comments

Pamela Staub

January 24, 2009 2:05 PM

Well, I have been trying to contact individuals at Sterling since mid November about a modification of a lease that is a substantial part of our business. I have gotten no response from Sterling. They cannot even put me in touch with an individual who has the time or authority to discuss our individual situation. I had to put our credit at risk by not sending a payment before anyone finally took the time to give us a call. Of course the call was not to work a deal with us but from the collections department. One thing I can assure you is that Sterling Bank is not using the funds they received to help those that are experiencing the effects of the economy in their own businesses. We have never missed a payment until now but that did not help us in the long run. I am hopeful that we will not be just another small business statistic in the coming months. But, if the banks don't start trickling down some relief to those that truly fuel the economy in the form of the small business and consumer spending, I think we will see that we may be putting our eggs into the wrong basket.
I would appreciate any ideas as to how to get a large bank to take a look at an individuals situation.
Signed,
Disturbed in Small Town America

Wall-Street Prophet

July 10, 2010 10:07 AM

Pamela, unfortunately your situation does not come as a surprise. This is what has been happening all along, since the crash began. Both the regulators and the banks alrerady know this and we believe it is being done intentionally. Now, you know it too. Regrettably they have taken a short term view of protecting their own self interest because they know that there are massive debt defaults coming. This view may help "them' in the short term but will prove to be like cutting off their nose to spite their face. Everyone knows that small business IS the life blood of the economy and job creation (approx. 70% of new jobs) but nothing has been or is being done to help small business, which would help main-street! So if you want to see where this is all leading to, just ask yourself why. Come visit us at www.wsprofit.com if you want to learn more about the real picture of the markets and the economy!

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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