The entire Wisconsin banking community is pleased that the banking regulatory system worked as designed last Friday when the Department of Financial Institutions closed Bank of Elmwood, Racine.
Importantly, depositors were protected as there was a seamless transition to Tri City National Bank of Oak Creek. Wisconsin’s banking community expresses its support to the affected employees, directors and shareholders of the Bank of Elmwood.
Until last Friday, only 16 states, including Wisconsin, hadn’t experience a bank closure since Jan. 1, 2008, which tells us two things: The conservative lending culture of Wisconsin banks has served our state and industry well; but also that economic conditions across Wisconsin are weak and because of that fact, banks will continue to face challenging times.
Banks didn’t cause this recession as so many believe. We also were not bailed out as so many claim. We didn’t make irresponsible subprime loans to people who didn’t have the capacity to repay them. We didn’t speculate in investment instruments we didn’t understand, like credit default swaps and other derivatives. And we are doing our best to meet the demand for loans to qualified borrowers.
We understand our vital role as the foundation of economic development and job growth in every corner of Wisconsin and our nation. We want to make prudent loans to businesses in the communities we serve because if those businesses don’t succeed, neither will we.
We know that many people are angry and looking for someone to blame. But targeting that anger at banks is misplaced and counterproductive toward achieving an economic recovery.
Specifically, too many elected officials are leveraging the public’s confusion over who caused this crisis to attack banks and push legislative agendas that will make a bad situation worse for our industry and, ultimately for the businesses and consumers we serve.
There is already a lengthy list of obstacles beyond our control impeding our ability to do what we do best; make loans to qualified businesses and consumers. Lawmakers need to consider the consequences of adding more burdens and costs on the very institutions they need to help rebuild our nation’s economy.
Whether we are local, regional or national banks, we rise and fall together. WBA and CBW pledge to redouble our collective efforts against legislation and other regulatory proposals that are only counterproductive to the banking industry’s ability to help with an economic recovery.
This joint statement was written by Wisconsin Bankers Association president and chief executive officer Kurt Bauer and Community Bankers of Wisconsin president and CEO Daryll Lund.