FARMINGTON, Conn. – The Connecticut Bankers Association is fighting back.
Responding to the recent round of negative national news stories about the financial industry, the association is recommending that member banks submit op-ed pieces to local newspapers.
The message: Your local commercial bank, savings bank and savings and loan is “safe and sound,” and that they are both highly capitalized and well-regulated institutions.
“As well documented in various media outlets, the current economic downturn is becoming a crisis of confidence and the banking industry needs to bolster consumer confidence with the real story,” said Lindsey Pinkham, senior vice president and secretary of the association, in a memo to bank executives.
The memo offered a potential op-ed submission from Diane Casey-Landry, chief operating officer and senior executive vice president of the American Bankers Association.
“Pick up a paper, or listen to the quick bursts of news on TV or radio, and what you get are reports of a subprime crisis, a ‘banking’ crisis and market turmoil. That’s only intensified on the rare occasion that a bank fails,” Casey-Landry wrote. “Let’s set the record straight: The banking industry – traditional federally insured, federally regulated depository institutions – your local commercial bank, thrift or savings bank – is safe and sound. And your account in commercial banks, thrifts and savings banks carry FDIC insurance. That means your account in a federally insured bank is protected up to $100,000, with additional protection for joint accounts, and $250,000 for a retirement account. …”
“The challenge we are facing is that words matter,” she continued. “And when one word is used to mean several different things, it inevitably creates confusion. For example, we know what a bank is – or at least we think we do.
“Sometimes a business that wants to add status to its name will call itself a bank even though it is not an insured depository institution.
“Bear Stearns was not a commercial bank. It was not an insured depository institution. It was an investment ‘bank.’ The word bank is also applied to mortgage firms. Their function, their purpose and their regulation differ from federally insured depository institutions. …”
“Our banking system is strong,” she concluded. “This crisis will pass, as have all the others, and the result will be a stronger financial system with fewer unregulated players and a reminder that liquidity and capital are both important to solvency.”
The Connecticut Bankers Association is an orginazation that represents the financial institutions in the state of Connecticut, acting as the voice of its members in matters of their common interest. More information about the association can be found at www.ctbank.com.
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