While some local bank customers have shown concern for their deposit investments, Baldwin City’s banks currently are secure.
Jay Loschke, vice president of Kansas State Bank, said although people have called to ask about their money, the current banking crisis is focused on large investment banks and not commercial banks like those in Baldwin.
"As a general rule, most of your local banks are in good shape," Loschke said.<br/>Dave Hill, president of Mid America Bank, said a lot of the trouble is in real estate loan portfolios of banks that made bad loan decisions.Dave Hill, president of Mid America Bank, said a lot of the trouble is in real estate loan portfolios of banks that made bad loan decisions.
Dave Hill, president of Mid America Bank, said a lot of the trouble is in real estate loan portfolios of banks that made bad loan decisions.
“If you’re not heavily or at all involved with that type of lending, you’re probably in pretty good shape,” Hill said.
Tom Dillon, president of the Baldwin State Bank, said many of his customers have called to inquire about the Federal Deposit Insurance Corp. insurance, which was raised from $100,000 to $250,000. He said this has eased the minds of many customers.
“I really don’t anticipate losing the volume of deposits we have. If anything, we may see an increase in deposits due to the volatile stock market,” Dillon said.
Loschke said this increase would allow people to bring more money into the banks.
“Hopefully the folks in the area will feel more comfortable with that in place,” Loschke said.
Loschke said most of the bank’s practices are staying the same. He said there may be an increase in paperwork for loans but that will be the only real change his customers will experience.
Dillon said the Baldwin State Bank’s loan policies always have been conservative, for example, only lending 80 percent of the appraised value on a house, so it won’t have to change its policy.
Hill already is looking to the future and thinks everyone will be better off and learn from this situation. He said it could loosen competition and help his bank pick up market shares.
“It’s a great lesson for all of us to learn about financial responsibility,” Hill said.
Hill said one of the things he is most concerned with is the unemployment level in the Baldwin City area. While the city is OK now, an increase could mean problems.
“People will pay their bills as long as they’re working,” Hill said.
He said Baldwin’s employment diversity is a good sign because no single major local employer exists who could harm the economy.
Another factor Hill pays close attention to is property valuation, which has seen a slight decrease.
“My hope and thought is that we can stabilize current values over the next year so that we can floor the valuations and start rebuilding,” Hill said.
Dillon said it might be more difficult for people to get credit in the near future and that credit card companies may have tighter standards.
“I think credit cards have been abused for several years,” Dillon said.
Sophomore Brooke Soske recommends students only use credit cards for what they need. She avoids using hers because her parents pay for it, and she doesn’t want to waste their money.
