The fiscal crisis may be sinking financial giants on Wall Street and producing plenty of hot air in Washington, but local bankers see no reason to panic.

Changes may be on the horizon, they say, but for now local banks and credit unions are in good shape.

Coos Bay’s Bank of America is even seeing new clients. From Bank of America’s perspective, it’s good for business, but it’s not necessarily a good sign for the economy.

Bank Center Manager Chris Singh said his staff has welcomed five to 10 new customers through the door each week. They say they are leaving smaller institutions for what they believe is the security of a larger bank.

A handful of others have taken a drastic step. They told bank employees they don’t feel their money is safe in any bank and have cashed in their accounts entirely.

“We tried to talk them out of it, but certain folks didn’t want to listen,” Singh said.

The trouble with people putting money under their mattresses, per se, is that it is more vulnerable to theft or accident. What if your house burns down? There are other consequences, too. With less money to lend, fewer banks make loans. Fewer loans translate to less spending. Eventually the impact filters through the economy.



“It’s not good for anybody for people to run scared,” Singh said.

Managers from local banks say they aren’t seeing too many people in a panic. And bank executives are confident there’s no reason to panic.

While failed banks such as Washington Mutual and Wachovia dabbled in the sub-prime mortgage lending business, community banks and credit unions stuck with safe ventures and are in good shape.

Cheryl Grigsby, chief executive officer of Coos Educators Federal Credit Union, said members have come to her asking if their money is safe.

Her answer is yes.



“We are very well capitalized here,” she said. “We have enough reserves to pay back all our members and then some.”

Part of the reason is because of this credit union’s conservative nature. It does not provide mortgages or credit cards.

“We’ve always practiced the strongest loan guidelines,” she said.

“We don’t have high yields but we’ve been steady and it’s paid off in the long run.”

When word of the financial crisis first broke, bank employees were given talking points and warned that worried customers might be on the way. None of that has materialized, she said. At least not so far.

People who do have concerns should ask questions first instead of moving their money around or taking it out of banks, Singh said. He said accounts are generally insured up to $100,000 in Federal Deposit Insurance Corp.-insured banks. The National Credit Union Administration insures credit unions.

 There are ways to have even more savings insured by opening multiple accounts or sharing accounts between spouses. Some retirement accounts are covered to up to $250,000, said Singh.

“All they have to do is ask banks how to keep their money safe,” he said.

At Umpqua Bank, Chief Financial Officer Ron Farnsworth said said only those banks that dabbled in subprime mortgages are facing problems.

“That’s been the bane of it all,” he said.

He noted that there are 8,500 banks in the United States and only about 100 are suffering because of bad sub-prime loans — Washington Mutual being the poster child.

“They really played in the sub-prime mess,” he said. “The banks that didn’t are still around.”

Renee Middleton, district manager of U.S. Bank, said her company is aggressively looking for loans.

“Our bank is extremely strong and it’s a good place to be right now,” she said.

Like Grigsby and Farnsworth, she credits U.S. Bank’s choice not to deal with subprime mortgages.

Farnsworth said there is a possibility the credit problems affecting larger banks might trickle down to community ones like Umpqua, but for now that isn’t happening.

He said the number of accounts at the bank is growing, probably from customers who are shifting accounts away from banks like Washington Mutual.

And he noted that even those who banked at Washington Mutual were all right as long as they didn’t invest in the company.

“Equity and bond holders were wiped out,” he said. “But if you’re a depositor, you are fine.”

Bankers do admit there could be problems on the horizon. Farnsworth said a lot of people get loans from the big banks having financial difficulties. If those institutions limit the number of loans they accept, more people will look to smaller community banks.

“Then they would strain small community banks ability to issue loans,” Farnsworth said.

He said it would be a good thing to have the $700 billion bailout so those larger banks could continue lending.

The lending industry already has adopted the strictest lending criteria in decades, Signh said. In the future it may be tougher to get a loan and the interest rates would be higher.

Grigsby said the bailout would only serve as a small Band-Aid on a big wound.

“It’s going to get way worse before it gets any better,” she said.