MONEY AND WORK

News from the Progressive Review, providing alternative news and comment for over four decades.

May 4, 2009

SMALL BANKS BEING CHARGED FOR BIG BANKS' PROBLEMS

Wenatchee World, WA - Small community banks - like Cashmere Valley Bank - that had nothing to do with the excesses of big Wall Street firms that led to the financial meltdown are now paying a price they protest is unfair.

Community bankers find themselves under tighter scrutiny from federal regulators. They say the $700 billion financial bailout has favored large institutions. And they are upset about a special assessment the government wants to charge to shore up the Federal Deposit Insurance Fund, which failed banks are draining.

"We've run a successful, safe financial institution," Ken Martin, president of the Cashmere-based bank said. "Those of us who were responsible and still exist are getting hit with those huge premium increases. And at the same time they're giving these huge bailout amounts to the Citigroups."

In 2007, Cashmere Valley Bank paid about $89,000 in 2007 in premiums to the FDIC, the federal entity that insures bank deposits.

This year, it expects to pay $1.35 million in premiums, plus an additional $900,000 to $1.8 million "special assessment" needed because the premium increase still won't be enough to shore up the FDIC.

"The small, community bank is just being hammered with these huge premiums," Martin said. "It's huge. That's like 25 percent of our 2008 earnings in increased premiums.". . .

0 Comments:

Post a Comment

<< Home