Colorado Sens. Mark Udall and Michael Bennet and Rep. Betsy Markey went to Treasury Secretary Tim Geithner this weekend to ask him for stimulus funds to save farmers and small business owners devastated by the failure in April of the New Frontier Bank of Greeley. The Colorado delegation asked Geithner for roughly $700 million in loans.
The situation in the wake of the Greeley bank closing is dire for thousands of Front-Range farmers desperate for cash.
AP reports that area residents are baffled by the government’s decision to close the bank instead of bailing it out, as the government did for major international banks. The abrupt closing has virtually shut down access to seasonal credit essential to the farm industry:
Windsor Mayor John Vazquez told the delegation he also can’t get a loan for his small business and that the government crackdown on loans is making a bad situation worse.
Sam Herston, a Loveland farmer, demanded to know why the federal government didn’t step in sooner and prevent the bank from being shut down after federal regulators were notified in December that the bank was in trouble.
Gary DeJohn, president of DeJohn Housemoving in Greeley, told the panel the situation is dire for many local businessmen.
“This is Katrina,” he said.
But AP reports that the fed is taking a hard-line on providing local loans.
Ron Bieker, deputy director for the Division of Resolutions and Receiverships for the Federal Deposit Insurance Corp., said the FDIC took over the bank to shut it down, not to provide interim loans.
He also told the farmers and ranchers the FDIC is doing all it can to support other local banks who want to take over the loans, but warned, “We’re not a long-term solution to your problems.”
That stance contrasts with the infamously soft line the government has taken when it comes to doling out bailout cash to Wall Street.
Two weeks ago at a Capitol Hill hearing Rep. Elijah Cummings, D-Md., pressed AIG spokesmen on the squishy estimates reported whenever the company is asked how much it is paying out in executive bonuses. AIG now admits to doling out more than $454 million in bonuses for work performed in 2008.
That’s up significantly from estimates provided previously but still nowhere near earlier calculations. In March, the Wall Street Journal put the bailout bonus number as high as $1.2 billion.