Bankers want to lend, but issues loom

Bankers want to lend money, but another issue looms

As President Barack Obama pushed his latest government-funded way to get the economy rolling in a March 2 speech — this time it's the Small Business Lending Fund — a room full of bank executives in Sarasota were talking about what they say remains the real issue of the day: raising capital.

The bankers' point was that Obama can dress up stimulus anyway he wants, with the latest being this transfer of $30 billion in TARP money to the new lending fund, which would be administered mostly under Small Business Administration guidelines outside of TARP. But the local bankers responded, not surprisingly, that without capital, banks won't be doing any lending.

“We are sort of hoarding our capital to just hang on,” says Charlie Murphy, chief executive of Sarasota-based Bank of Commerce. “Many of us aren't even taking on new customers.”

Added Tom Quale, president and CEO of Sarasota-based LandMark Bank: “SBA loans may be getting too much political focus. The shift needs to be on capital issues.”

The bankers met per the invitation of U.S. Congressman Vern Buchanan, R-Longboat Key.

The bankers, in general, were optimistic on the concept of finding a way to loan more money to more businesses. Murphy says the psychological effect of more loans in the business community could go a long way toward restoring confidence in the economy.

But Charlie Brown, the chairman and CEO of Sarasota-based Insignia Bank who has testified before Congress on community banking issues, told Buchanan there are some issues with the proposal.

For one, says Brown, SBA loans, while a good thing, are complicated. The heads of the seven other bankers nodded in unison when Brown spoke about the multiple steps and procedures necessary to run a good SBA unit.

“Just making the loans is one thing,” says Charlie Conoley, president and CEO of Bradenton-based Horizon Bank. “But if you aren't set up administratively, it could be a nightmare.”

Buchanan told the bankers he thinks the concept will catch on, mostly because Democrats in Congress are pushing the president to do something on jobs and the economy — instead of only focusing on that other issue generating so much attention.

“I've been disappointed in the last year and a half,” Buchanan says. “We've been preoccupied with other things, primarily health care, and [jobs and the economy] have taken a back seat.”