Strangled! Texas Bank Fed Up, Quits


Main Street Bank, of Kingswood has had enough. They are fed up with all the added federal red tape and regulation. Chairman of the bank, Thomas Depping has said the bank will sell its four branches and rescind its banking charter. The company plans to reorganize in a way where they can continue to specialize in small business financing with the boot of federal regulators constantly on their neck.

“The No. 1 complaint that we hear from community bankers is that they feel that regulators have gone one step too far and are choking off lending,” says Paul Merski, chief economist at the Independent Community Bankers of America, a trade group that represents small banks.

Regulators defend their efforts, saying that intensive oversight is needed to prevent banks from taking too much risk and repeating the behavior that got the industry in trouble.

Mr. Depping has been on a collision course with regulators since 2009, when FDIC examiners began questioning the bank’s large concentration of small-business loans. Nearly all of Main Street’s $175 million loan portfolio has gone to customers like dentists, owners of fast-food franchises and delivery-truck drivers, who use the loans to purchase equipment. The bank’s average loan size is $100,000 to customers who have less than $1 million in annual revenue, Mr. Depping says. — Robin Sidel, WSJ

This is just another example of the consequences of huge government and how it reacts and over-reacts. We keep hearing how hard it is for a small business to get an operating loan. Obama can lie all he wants to about focusing like a laser on jobs. The reality is much different. So different that even a casual observer might wonder about the real intent of Obama policy. What we see is a lot of damage and no jobs.

In other news, the DOW resumed it’s plunge today, off over 500 points. Looks to me that a lot of people are Fed up and giving up.

Obama: no jobs, no prosperity, no empathy and ready for the dust bin like his pals below.

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Texas native. Conservative small businessman with 31 years experience. Government should roll back the nanny state. No country can tax its way to prosperity. The question isn't who will let me but who will stop me?

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Queen Hotchibobo
August 12, 2011 12:24 pm

I work in a community bank and we are having the same problem. It wasn’t our kind of bank or our kind of lending that caused any banking problems. Citibank is the one who needed the TARP bailout, all the other [redacted] Uncle Sugar shoved on the industry was just there to cover up for them because they didn’t want to eat their losses. Fannie and Freddie caused the housing crisis, not community banks. But just wait until community banks are all gone, you won’t be able to get a small business loan at the Too Big To Fail banks;… Read more »