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Yell From The Rooftops or Doom Us All.

By Mark Singleton


In the United States, more than one-third of all U.S. consumers have a banking relationship with Chase, Bank of America, Citibank or Wells Fargo. The US Government has given those Big Four banks billions of bailout funds to save them from going under. Surprisingly, 68 per cent of their customers have stayed loyal to them.
I just don’t get it.
If an independent bank in Ellis County treated customers with absolute mismanagement of their funds and then paid huge executive bonuses, I can promise you that the local banks would not have 68 per cent of their customers remaining loyal. I’m just guessing, but I think 100% of their customers in a small bank would close their accounts and transfer their funds to a bank with integrity.
When the bad banks like the Big Four needed funds, the FDIC went to their insurance stockpile and along with government bailout funds, breathed new life into the cardiac-arrested banks. So guess who gets to replenish the funds at a higher rate of assessment than ever in the history of banking?  
That’s right…. the 8,000+ banks that didn’t do dirty deeds are being given the broom to help sweep up the mess. Because 3 per cent of the banks in the U.S. cheated, lied and stole, the other 97% of us are paying more to the FDIC to boost up the reserves.
At CNB of Texas our payment to the FDIC has increased from approximately $58,000 in 2007 to an estimated $585,000 in 2009. Now, the FDIC has proposed asking banks to prepay three years of premiums to replenish reserves.
Now, multiply that colossal percentage of increase in FDIC payments times the amount the 8,000 Good Banks will pay in added charges and possibly you will share in my outrage. It is time to yell from the rooftops, loud enough for the government to hear our rage, or else we will all be doomed by the act of charging many for the evils of a few.                                                    
So, what happens when the cost of doing business increases? Ultimately the expenses trickle down to the taxpayer and consumer in several different ways.
First, the Good Banks will be forced to become more conservative in their decisions in order to assure safety to their customers, stockholders and employees. That conservatism makes loans more difficult to acquire and thus places a higher emphasis on earning revenue through service fees, which directly affects the customer. 
Second, in an effort to establish safeguards to protect us against Wall Street and Big Banks mugging of America, congressional bills are on the landscape that will create chaos instead of control. The Consumer Financial Protection Agency Act of 2009, H.R. 3126, is a perfect example.
What Barney Frank, the chairman of the House Financial Services Committee, wants to do is establish another protection agency for consumers; an added layer of bureaucracy that will result in higher prices. CNB of Texas already has numerous bank regulatory agencies and groups to whom we must present stacks of reports, but we’re a bank. Now the government wants to monitor all businesses that have anything to do with the financial or lending process ranging from tax preparers and antique appraisers, to pawn shops and retail stores offering in-house credit or deferred payments.
Therefore, because of zealots in Washington wanting to control your lives, the
additional costs of all the paperwork, compliance, and personnel will be passed on to the consumer. It doesn’t take a little here and a little there to make a big difference in your cost-of-living.   And do you honestly believe the government when politicians proclaim that it will only be the rich that will pay more taxes?                        
The situation is not hopeless and there are several pro-active actions you can take to say you are mad and are not going to take it anymore.
First, if you are a customer of one of the banks that took the bailout funds because of their mismanagement or greed, send a statement that your trust has been disgraced and you are moving your funds. Citigroup has been bailed out four times since 1907. When is enough, enough?
Second, let your representatives in Washington know that they are accountable to you and America. Those politicians are not only roping us into submission, they are hanging our grandchildren with an economic burden that will destroy America. Don’t let them off the hook. Make them accountable or vote the rascals out.
Third, don’t take my word for it, take a look at H.R. 3126, the Consumer Financial Protection Agency Act of 2009. I think it will scare the bejabbers out of you. 
If it does, and it will, make sure your representatives in Washington know your disgust.
Remember, they work for you, not the other way around.
Fourth, write op-ed columns like this, or letters-to-the-editor, or e-mails to friends. There needs to be an economic revolution or our forefathers’ courage will be wasted. If you stay silent then you can not complain that you have no voice.
This spend, spend, spend mentality of the government and lack of backbone to punish the perpetrators that are desecrating our future has to stop. The consequence of sitting back and letting the other guy take up the banner of saving our economic lives will doom us all. Take a stand, yell from the rooftops and make a difference. Future generations are depending on you.           
Mark Singleton is President and CEO of Citizens National Bank of Texas. This column is part of a series that examines what banks, businesses and the general public in Ellis County can do to manage through current economic times.