Wednesday, January 14, 2009

West Mich Bank is Case Study for NY Times

Ionia-based Independent Bank is the focus of an article in today's New York Times about American banks taking bailout money but not extending credit yet to consumers.

At first blush it might seem like the Great Gray Lady is picking on a West Michigan institution to portray the nation's ill feelings towards banks and other bailout recipients. It would seem like bad publicity for Independent Bank, to be made poster child for an industry in turmoil.

On the other hand, the bank's officials who are quoted make a good case for themselves. They admit past mistakes, and stress that their caution and prudence with regard to lending in this economy is with the best interest of customers in mind, and perhaps overdue given the collapse of the money markets. There is good information in the article about the fact that Independent Bank IS extending credit to businesses and consumers who show merit that they can be successful.

One bad moment--Independent Bank Senior Vice President Keith Lightbody is described visiting bank properties in his Mercedes. I'm not going to take that away from him personally, but it is not the best image in an article essentially about belt tightening.

But the bank redeems itself with this concluding quote from CFO Robert Shuster:

“There is no stone we won’t turn over to make sure we are good stewards of this money. We feel an enormous responsibility to this Treasury. I am a taxpayer too.”


Moral of the story--don't fear the media. There could have been an inclination to avoid comment on this story. Instead, Independent Bank made its case. Sure, some might read this article and conclude banks are sitting on taxpayer bailout money. But that was the general opinion before this article came out. Independent Bank took the opportunity to advocate its point of view and let the public make a more informed decision about the issue. I think the bank did a fine job, and I extend them my own "credit" for doing so. I'm sure they'll have enhanced street cred in Ionia as well as Manhattan.

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