While banks have drawn wrath for decreased lending levels and more stringent credit requirements in the aftermath of a financial crises, local bank executives say the overall situation is changing.
The executives add, though, that their own operations always have required such basics as good credit histories and proof of income from loan applicants.
Even as government officials have insisted that banks have money to lend, banking officials have complained that regulators have prompted tighter standards. As 2010 gave way to 2011, local banking executives sounded more optimistic about making loans they’d been reticent to extend a year ago,
“For the industry in general, I think the lending is improving,” said Steve Gunderson, Western Colorado regional president for U.S. Bank. “For our bank, it’s never stopped growing, and it will continue.”
Gunderson emphasized the reported solvency of his organization and the bank’s history of requiring such basics as good credit and proof of income from loan applicants. “We are the only major bank that has not had a quarterly loss, ever,” he said.
Other bank executives in the Grand Valley are similarly quick to point out the advantages of their operations.
Vectra Bank and its parent company, Zions Bancorporation, carry a risk-to-capital ratio of 14.2 percent, said Carol Skubic, market president for Vectra Bank in Grand Junction. In general terms, that means about 14 percent of Vectra’s assets are liquid — easily accessible to convert to cash if necessary. Vectra’s liquid assets are 40 percent higher than they were at the beginning of the recession in 2007, Skubic said.
“To be well-capitalized, a bank must maintain a level above 6 percent,” Skubic said. “It’s a core measure of a bank’s financial strength from a regulator perspective.”
Skubic said lending standards haven’t changed at Vectra Bank. “We’ve always held to the same credit standards,” she said, adding that a down payment and proof of employment always have been required.
Vectra Bank and most commercial banks also avoided fallout from the financial crisis because they didn’t participate in the sub-prime mortgage business that crashed in 2007. Sub-prime loans were extended to people who couldn’t qualify for traditional mortgages. When the housing bubble burst, millions of such loans went bad.
While lending remains a hot topic, bank executives said there are plenty of other reasons to do business at banks. One is often overlooked in the discussion of the volatility of stock market or real estate investments — the savings account. “We’ve seen an increase in deposits,” Skubic said. “Often, they’ll return to the safety of their bank.”
Vectra Bank also offers treasury management services, she said.
Perhaps one of the most important services, though, is a constant supply of advice, Skubic said. “I really recommend bringing concerns to your banker. We encourage open dialogue with their banker.”