Coronavirus (COVID-19): Small Business Resources


Why small banks are not lending

We had been hearing that banks were not lending because they are under very tight government scrutiny. That seems to be the case based on a great article from USA Today called Small banks say they can’t win in small-business lending”. According to the article, while Washington continues to urge banks to lend, Bank examiners from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are devaluing small bank portfolios based on the declining values of the commercial properties banks have taken as collateral.

According to the Article:

Rep. Blaine Luetkemeyer, R-Mo., a former bank examiner, recently laced into top banking regulators. “We have this huge disconnect between what’s going on here in D.C. (and) what’s actually been going on out in the field,” he told them at a joint hearing of the House Financial Services and Small Business committees. “Quite frankly, you guys are part of the problem.”

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