Federal regulators had a message for nation's banks, thrifts and credit unions on Friday: They want the institutions to do their best to make good loans to creditworthy small businesses, and they shouldn't worry about being scrutinized by regulators for making them.
"The regulators recognize that small businesses play an important role in the economy and know that some are experiencing difficulty in obtaining or renewing credit," the statement said.
The statement was published by the Federal Reserve, the Federal Deposit Insurance Corp., Comptroller of the Currency, Office of Thrift Supervision and the Conference of State Bank Supervisors.
Local bankers said the statement won't prompt them to change their approach to making loans to small businesses.
They said they will continue to make loans to small businesses using the same underwriting standards.
The statement doesn't provide them any comfort from fear of being scrutinized by regulators.
"It's meaningless" said Emprise Bank CEO Tom Page.
"This tells you how disconnected these people are, that this is supposed to be reassuring to us."
Brian Chamberlin, executive vice president and chief credit officer of RelianzBank, agreed and said banks want to make good loans to small businesses, but demand for them isn't there because of the sour economy.
"Banks are going to be extremely smart and diligent" about making small business loans, Chamberlin said. "This (the regulators' statement) isn't going to change much."
Trish Minard of Southwest National Bank said when the opportunity arises, banks want to make good loans.
"There's so much liquidity in the system," Minard said.
Demand for small-business loans isn't there, she said.
Chamberlin said bankers also are skeptical about not being scrutinized for making loans to small businesses.
"That's been the real dilemma over the last 12 months," he said. "You've got (the Obama administration) encouraging banks to lend to small businesses, then you've got the regulators over here going, 'You better not lend to them.'
"You've got one arm pulling you one direction and another arm pulling you the other direction."