Posted on 08/11/2011 8:35:05 AM PDT by SeekAndFind
Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.
In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.
Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators—and the deposit-insurance safety net. Backed by the private investment firm of Microsoft Corp. co-founder Paul Allen, the company won't be able to call itself a bank, but it will be able to do business the way Mr. Depping wants.
"The regulatory environment makes it very difficult to do what we do," says Mr. Depping, who last summer saw his bank hit with an enforcement order from the Federal Deposit Insurance Corp.
A spokesman for the FDIC declined to comment on Main Street, a unit of closely held MS Financial Inc. Dan Frasier, director of corporate activities for the Texas Department of Banking, confirmed that Main Street is "working on the process of moving out of the state banking system," but declined to provide details.
Bankers have long complained about their overseers, but it is rare for a bank to basically close its doors aside from an acquisition or failure. Mr. Depping blames the move on a tightening regulatory noose.
Regulators came under fire in the financial crisis for lax oversight that allowed financial institutions to dole out too much credit to unworthy borrowers. Some bank executives now complain that federal and state agencies have swung to the other extreme,
(Excerpt) Read more at online.wsj.com ...
I reckon there are banks out there doing the right things, but as a group, I just can’t feel too sorry for them.
Who is John Galt?
I’ve been asking “*Where* is John Galt?” for years.
The first two orders of business for the next POTUS:
1. EO cancelling ObamaCare
2. EO cancelling the Community Reinvestment Act
Or in this case "Who is Midas Mulligan?"
“Interesting how history is being (re)written, before our eyes. Banks were forced (by government regulations) to give mortgages to “unworthy borrowers”. “
I agree, but the gov did not watch over what was going on with the derivatives. That has made the situation far worse.
>>>>>”The regulatory environment makes it very difficult to do what we do,”
california businesses are fleeing the state by the legions because of over regs.
Only 4 branches - this guy certainly qualifies as a small businessman.
This is just one of many ways how an activist Gov’t actually CAUSES income inequality - only the big boys can afford the lobbying, lawyers and compliance people. The small operators that support the middle class owners can’t survive.
“Regulators came under fire in the financial crisis for lax oversight that allowed financial institutions to dole out too much credit to unworthy borrowers. Some bank executives now complain that federal and state agencies have swung to the other extreme, poring over minute details of virtually every loan, including those to small businesses.”
Back off and let the bad eggs raise a stink, then come in harder with more control to “clean up”.
Almost sounds like a plan.
the manager of my credit union threw a 20 minute diatribe about how the Obama Administration is trying to kill them with regulation, despite the fact that they never wrote a sub-prime mortgage
Frank-Dodd bill needs to be repealed.. Its Queer as a three dollar mortgage..
“...the gov did not watch over what was going on with the derivatives.”...
Correct “government” did not. With a wink and a nod from the Clinton Administration government encouraged them. It was one of the gifts to f.o.b. (Friends of Bill)
LOTS of money was made, redirected during the era of Bill to friends, associates, ALL supporters of the Democrats. Part of the overall plan, and it was executed flawlessly.
It was established precedent by the time of Bush, and was virtually impossible to stop by then without causing turmoil prematurely that would have put the responsibility on the Republicans, instead of the Democrats.
The first two orders of business for the next POTUS:
1. EO cancelling ObamaCare
2. EO cancelling the Community Reinvestment Act”””
AMEN.
Add cancelling the EPA & about half of the various ‘departments’ in the Cabinet, including HUD & “Education’.
John Galt is going to appear any day now.
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