One theme of President Obama's speeches has been "responsibility." For Obama, responsibility seems to mean that people who have money, talent, and power ought to take care of those who are weaker, poorer, and less capable. This idea comes through in the financial regulations that his party is currently trying to push through Congress.
The trouble with that approach (an approach which, to be fair, is similar in some ways to the big government, compassionat conservatism of President Bush), the middle men in communities across the land are getting squeezed. The financial reform bill will be good for big banks, but make life more difficult for smaller banks. As Sarah Wallace, a banker in Ohio, notes in todays' Wall Street Journal the little guy will not be well served by the new regulation.
Here is the problem as I see it. First Federal lends to creditworthy folks who for decades have been well-served by bankers who understand their market and can think creatively to structure credit appropriately. It is what community bankers do. Going forward, we will no longer be able to evaluate loan applications based solely on the creditworthiness of the borrower. We will be making regulation compliance decisions instead of credit decisions. This is not in the best interest of the consumer.
I have said to our employees many times, "We are in the business of helping people!" Sometimes, bad things happen to good people, people we see in the grocery store and at Little League baseball games. We used to believe that if someone hit a bump in the road of life and came to us for financing, we could often figure out a way to help them. I fear this kind of community-oriented banking will end. There will be creditworthy borrowers who will no longer be able to get loans.
Perhaps the tea parties will help the Republicans start to peel back regulations that strengthen the big business, K-street, Washington axis. As we can see now, the Democrats' approach is simply to accept centralization, and to try to reguate it more. The trouble is that the U.S. is too big to have one-size fits all regulation. A nation of diverse communities needs diverse laws and regulations.