It turns out that the community banks--those small (under $1 billion in assets), locally-focused financial institutions whom BizBox has veritably lionized these last several months--have been doing alright even now. According to Entrepreneur.com, over half saw an increase in deposits last month, and nearly that many saw new business customers (maybe BizBox readers!). To read our interview with Colorado community banker Dan Ford, click here; to read our very own Michael Taylor discuss how he found a small bank that would lend to his small business, click here.
Meanwhile, one thing we've noted about the community banks has been their great reluctance to take the money offered to banks as part of the federal government's Troubled Assets Relief Program. A main concern was the appearance of it (taking the money makes it look like you needed it and therefore are struggling). But another concern was the restrictions the federal government was imposing on recipients, including some that weren't even disclosed--as Dan Ford put it to us, "The contract said you would comply with all present conditions and all future conditions imposed. Well, have you ever signed a contract where they said they'll tell you what the terms are later???"
Now comes news that many banks, including small ones, that did elect to take TARP money now want to return it so that they do not have to comply with the conditions--especially feared future limits on foreclosures and the like. Looks like the community banks--the small businesses of the financial industry, and the ones frequently most available to the small businesses of other industries--were ahead of the game on this one, too.
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April 04, 2009