25 April, 2009

How your bank can use the crisis to its advantage

When the childlike view of the world went, nothing replaced it… nothing replaced it… nothing replaced it… —Pink Floyd, "Signs of Life"

A few days ago I heard a radio advertisement from Hancock Bank, a regional outfit. The script contained a clever argument to win business by drawing distinctions in the current crisis:
  • Hancock Bank shares the values of people who live in this area of the country;
  • these values include self-reliance and personal responsibility;
  • for this reason, they ran their investments carefully, and did not fall into the subprime trap;
  • they do not believe in taking hard-working taxpayers' money;
  • thus, they refused government bailout money.
At least one article I found online confirms the bank's claim.

I frankly derived a great deal of satisfaction from hearing that advertisement. In a world where cynics insist smugly that everyone in the lending industry engaged in disgraceful behaviors, where the government has been pressuring financial institutions to go onto their payroll, the advertisement, even if exaggerated, provides a breath of fresh air. Likewise the credit unions who have been boasting that they continue to have plenty of money to lend.

I don't doubt that the situation is somewhat more complicated than the ad lets let on, and a perusal of the article I've linked to seems to confirm this. Still, the government's actions over the last few months leave a sour taste in my mouth. I don't doubt that the current situation would be much worse than it has been without the bailout, and the dismaying news of Freddie Mac's CFO's suicide the other day seems to confirm this in the most unfortunate of ways: but the way our elected representatives have preened, postured, and pandered to the worst of our vices—as I said, it's no accident that the party of envy currently runs the government—has left a sour taste in my mouth. For once I'd like to see a government official stand up and say, "I was part of the problem, and I take responsibility for it."*

The ad won't convince me to bank with Hancock, since credit unions appeal to the naïve Distributist in me. Still, the news that some banks not only feel comfortable refusing bailout funds, but broadcasting their independence, warms my heart. I guess I share some Mississippians' values after all.

*This reminds me of Alan Greenspan, who to his credit did admit some fault. I remain disillusioned, inasmuch as he was no longer a government official at the time. (If the Chair of the Federal Reserve can be called a government official. I don't remember: it's been too long since I took that class on Money & Banking.)

Note: I original started this article April 14th, which gives you an idea of when I first heard the ad.

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