With credit still tight around the country, support for new public state banks is growing [View All]

[marmar]

from In These Times:



A New Model to Bank On
With credit still tight around the country, support for new public state banks is growing.

BY David Moberg


Jim Houser, co-owner of Hawthorne Auto Clinic in Portland, Ore., saw an opportunity to increase his sales of “plug-in” electrical charging kits for the locally popular Prius hybrid cars. But when he talked with his bank about a loan for enlarging his shop, which employs 14 full- and part-time workers, he got the distinct sense “that it would be a waste of time to formally apply for a loan.”

“Credit has dried up out there,” says Houser, co-chair of one of the state’s small business organizations, The Main Street Alliance. “It is hurting small businesses tremendously.”

Mahlon Vigesaa, president and CEO of CenterPointe Community Bank in the rural region of Hood River, Ore., has a different credit problem. There’s a promising wind power project in the bank’s service area that needs to borrow $6 million. A large out-of-state bank turned down the developer’s request, which Vigesaa would love to finance. But it’s too big for CenterPointe to do on its own.

“Big banks are not lending in small-town America,” says Barbara Dudley, co-chair of the Oregon Working Families Party. “They are either not lending or lending overseas,” thus slowing economic recovery and job creation. ...........(more)

The complete piece is at: http://www.inthesetimes.com/article/11964/a_new_model_to_bank_on