Sinners and Saints

The American financial system is global. It is the main engine that drives the world’s economy. As large players are remaking the financial world, small local banks are once again proving their resilience.

Large global investment banks have deservedly bitten the dust because of greed and dishonesty encouraged by inadequate regulation. The large commercial banks that played fast and loose with regulations also deservedly bit the dust. The people badly hurt were every-day folks like employees, taxpayers, stockholders, businesses that relied on lines of credit and the retired populace.

Turmoil on Wall Street has positioned Main Street community banks to prosper greater than ever before in history. Small business owners and consumers can clearly differentiate between investment banks, super-sized commercial banks and small community banks.

We now have small community banks from across the country surfacing with their side of what really is happening. See the links below to articles that have surfaced recently.

The 5 small Arizona community banks I helped start during the past 4 years are local, play by the rules and are generally very safe! They hire outside audit firms annually and outside firms on a quarterly basis to make sure management follow the strategic business plan authorized by regulators and mandated by the board.

Every single solitary FDIC insured bank is required to file a quarterly financial statement with the FDIC. Check records of any bank in the U.S. on the Federal Deposit Insurance Corporation Web site, www.fdic.gov. It is an open book.

The banks I helped start are Pinnacle Bank, Sonoran Bank, N.A., West Valley National Bank, RepublicBankAZ, N.A. and Gateway Commercial Bank. I am currently helping form 5 more banks in Arizona. That is how much confidence I have in the economic future of Arizona. That is how much confidence directors of the banks have. They are people of financial means who make a habit of carefully analyzing the businesses they start including banks.

None have conducted the type of business that has gotten their larger brethren in trouble. Our banks know better! Careful selection and training of board and staff pays off. Sonoran and West Valley are looking to acquire other banks. Check out the Web sites of all 5 at www.pinnaclebankaz.com; www.sonoranbank.com; www.wvnb.net; www.republicaz.com; www.gcbaz.com.

What an amazing time to start a bank. Check my site www.independentbankdevelopers.com then open some of the links below for current news about small banks across the country. Tell your friends and associates since all they have to go by is media sensationalism and the frightening political lies they hear.

As of June 30, the FDIC had 117 insured banks and S&Ls on its problem list. That represented about 1 percent of the nearly 8,500 institutions insured as of June 30.

Based on its analysis of the June 30 numbers, Bauer Financial, Inc. concluded that 426 federally insured institutions are grappling with major problems — about 5 percent of all banks and S&Ls.  About 13% of banks on the FDIC trouble list will usually fold.

“It’s scary right now, but it’s not as scary as a lot of people are making it out to be,” said James Barth, now a senior fellow at the Milken Institute, a think tank.  Barth was chief economist of the regulatory agency that oversaw the S&L industry in the 1980s.

Economic tumult is creating expansion opportunities for healthy banks.

Ernie Garfield, Chairman

Interstate Bank Developers, Inc.

Panel: County banks solid financially
Mount Vernon News – Mount Vernon,OH,USA
At this stage, I am not at all worried about the continued success of community banks.” It is the investment banks, however, which seem to be giving …
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Local banks benefit from crisis
RoxReview.com – Philadelphia,PA,USA
Small, community banks have gained business.”People are looking for peace of mind,” said Christopher McGill, president and CEO of East River Bank. …
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Hometown banks see increase
Jackson Sun – Jackson,TN,USA
Recent bank failures and instability in the stock market have driven some Madison County residents to smaller community banks. Deposits at the Bank of …
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Community-based banks still loaning money for many purposes
nwitimes.com – Munster,IN,USA
BY LU ANN FRANKLIN Unlike their big national and international cousins mired in a global credit crisis, community banks in the have money to lend, …
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Small US Banks Rise Above Financial Turmoil
NewsBlaze – Folsom,CA,USA
While their big-bank cousins have faced near-catastrophe in the recent market fluctuations, community banks report that they are healthier than ever. …
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Upside of Market Turbulence Is Opportunity for Community Banks
San Diego Business Journal – CA,USA
By MIKE ALLEN The turmoil that’s beset the financial services industry is generally having limited impact on most San Diego community banks, which didn’t …
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Local banks remain steady in unsteady times
New Richmond News – New Richmond,WI,USA
First National Community Bank President Denny Nybakken agreed that no one needs to worry about the financial health of the local, community banks. …
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Statement of condition
Purcell Register – Purcell,OK,USA
“We want to keep our customers happy and safe,” First American Bank Executive Vice-President Mike Murphy said. “We will be here for the long haul. …

Minnesota’s small and mid-sized banks still doing well
Finance and Commerce – Minneapolis,MN,USA
But their much smaller siblings among Minnesota’s community banks are generally doing just fine, keeping capital flowing into a surprisingly busy local …

‘We have cash to lend,’ many small banks proclaim
Nashua Telegraph – Nashua,NH,USA
Executives of three local community banks and credit unions say they avoided the disastrous path of subprime loans and are connecting qualified borrowers to …

Bank execs: Community banks afloat, on course in turbulent …
Russellville Courier – Russellville,AR,USA
I don’t know one community bank in the area that’s not making loans. “The public is inundated with national news that you can’t get a loan,” Ron Jackson, …

Banking savvy that will help you sleep
Boston Herald – United States
Despite the failure of several large banks, more than 65 percent of banks still receive four- or five-star ratings from BauerFinancial, which also rates …

NH banks‘ loan care pays off
The Union Leader – Manchester,NH,USA
By DENIS PAISTE MANCHESTER – New Hampshire community banks that passed on sub-prime lending during the housing boom are finding they have retained low …

Commercial banks stand to profit from Black Monday, economist says
Daily Commercial News – Toronto,Ontario,Canada
“The commercial banks are reaping a bonanza in cash deposits,” says Carrick. “In fact, there may be a double benefit to the bank from the stock-market …

Amid crisis, local banks see opportunity
Burlington Times News – Burlington,NC,USA
While no one truly knows what’s ahead, some folks say that North Carolina and its community banks could be a good place to weather the storm. …

Nothing’s the Matter With Kansas
Wall Street Journal – USA
Community banks like mine are still making loans and serving the needs of customers. I used to worry about competing in the world of mega “too-big-to-fail” …
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Local banks weather market
Evening Observer – Dunkirk,NY,USA
Daniel Drozdiel, district manager at Community Bank, said although people are being more cautious and restrictive with their investing, local banks which …

Amid financial crisis, healthy community banks see opportunity to …
New York Daily News – New York,NY,USA
That doesn’t mean, though, that community banks are immune to all the troubles plaguing the financial system. “There’s been an overall lack of confidence,” …

Business as usual for local banks
Marshall News Messenger – Marshall,TX,USA
By Charles Iyoho, News Messenger East Texas banks have remained sound, local bankers said Friday, despite Congress having to approve an unprecedented $700 …

Small banks may not see big bailout boost
San Diego Union Tribune – United States
By Mike Freeman San Diego County’s small banks conceivably could benefit from the controversial $700 billion bailout package by selling troubled mortgages …

Bailout raises FDIC coverage to $250K
Andalusia Star-News – Andalusia,AL,USA
CCB’s Allen Mims said community banks really aren’t involved in the kinds of problems Congress is trying to help solve. “Our deposits are here, …

Local Commentary — Independent community bank in strong, safe …
Morris Sun Tribune – Morris,MN,USA
They were investment banks, not a community bank! We have been asked by more of our customers in the past month or so “is my money safe in your bank? …

Bank branch now open
Times-Mail (subscription) – Bedford,IN,USA
The local community banks with us, and in turn, we can invest back into the local community. We can add a lot to this community from the standpoint that …

Mass. banks stand to make gains
Boston Globe – United States
“We could see some benefit to the commercial banks,” said Gerard Cassidy, managing director of equity research at RBC Capital Markets in Portland, Maine. …

Are NDs Banks/CUs safe? | KXNet.com North Dakota News
KXMC – Minot,ND,USA
Terry Zeltinger, President – United Community Bank: “We’re kind of insulated from this, because our economy is robust and things are going very well. …

The truth is, Graham’s banks are thriving
Graham Leader – Graham,TX,USA
“Community banks across this country, and especially in Texas, remain in good financial condition and have been doing business as usual,” Gober says. …

Bankers: Local money secure
Bluefield Daily Telegraph – Bluefield,WV,USA
“All of the national news is talking about the very large banks in the country. Most of the local banks, like First Community Bank, are community banks. …

Community banks eye ex-Wachovia depositors
Birmingham Business Journal – Birmingham,AL,USA
“There’s no question we are already receiving comments that customers are walking in the door wanting to bring their money back home to the community banks. …

Cape Region banks are weathering the financial storm
Cape Gazette – Lewes,DE,USA
Depositing more money with local banks also means community banks can continue to provide car and home loans – at least for now. …

Small US banks see deposits surge
United Press International – USA
WASHINGTON, Oct. 12 (UPI) — Bankers say there has been a surge of new deposits in small community banks across the United States since the Wall Street …

After 20 years, bank president still enjoys job
Times Daily (subscription) – Florence,AL,USA
“There hasn’t been a community bank that’s failed in the state in excess of 20 years.” It’s not just banks that are experiencing the most problems today, …

Big Country banks are safe, secure and stable
Abilene Reporter-News – Abilene,TX,USA
With regard to these events and despite all the commentary, we would like to advise people that community banks are safe, secure and open for business. …

As Larger Banks Crumble, Local Firms See Rush Washington Post – United States The draw of community banks, Cole said, is the relationship. “At times like this, people may feel it’s time to shift to a bank that’s nearby, … See all stories on this topic What credit crunch? Minneapolis Star Tribune – Minneapolis,MN,USA Indeed, a spot check with commercial banks across the state echoed Ruiter’s observation. “Our loan growth is up on the business side,” said Steve Meads, … See all stories on this topic

To be posted

Health Care Without Geographic Boundaries!

 

By Ernest Garfield

Former Arizona State Senator, Arizona State Treasurer, Arizona Corporation Commissioner

Master of International Management – Thunderbird School of Global Management

Bachelor of International Management – Thunderbird School of Global Management

Bachelor of Business Administration – University of Arizona

 

The gorilla in the room is health care.  One of the great American myths is that we have the best health care system in the world!  In reality, treatment is dictated by insurance companies, we have a shortage of medical workers and our system is not readily available to about one third of our citizens. 

 

Clearly, Congress and every state legislature must make health care a priority.  There are solutions!

 

Insurance companies are beginning to recognize the value of reduced cost of overseas treatment to their insured.  Blue Cross Blue Shield of South Carolina has a subsidiary that provides its members help with arranging travel and care in foreign locations.  According to Getahn Ward of The Tennessean, Aetna, United Healthcare and Blue Cross Blue Shield of Tennessee are exploring or offering a medical tourism product.

 

To reduce our rapidly escalating cost of health insurance, overcome our shortage of health care personnel and improve health care service, insurance companies licensed in our state should provide coverage for medical treatment anywhere in the world. 

 

Participating in globalized access to health care is the only immediate solution that will allow a patient to receive the best and least expensive care, alleviate the shortage of U.S. medical workers and guarantee that employers save money for employee benefits.

 

Universal health care approaches proposed by Congress and our President Elect Barack Obama are noble, but will clog our system badly.   Delays in treatment and inferior care will become standard unless we prepare our medical infrastructure in advance. 

 

Health care has globalized.  The international competitive marketplace is rising to the occasion and introducing features and benefits to consumers and employers.  Comparable or superior medical outcome at lower costs than with our American system can be more readily available for middle to lower income citizens.

 

The World Health Organization ranks hospitals around the world.  The WHO report is a reflection of their assessment of health systems of 191 member states.  The performance assessment is based on a number of country-specific variables such as socio-economic, political and technological.  While WHO’s method of evaluation may raise questions, the U.S. nonetheless came in as number 37.  See Chart II to learn whose medical services are considered superior to ours.  In line with this, Americans trail 30 nations in life expectancy and the U.S. is 29^th in infant mortality.  These two dismal facts cannot be denied.

 

One of the major problems confronting our health care systems is that of the uninsured.  There are around 45 million uninsured in the U.S.  While many are uninsured as a matter of choice, for most it is a matter of circumstance.  Many of the uninsured are foreign nationals who are here legally.  When they are admitted to a hospital, the hospital usually has to write off the care to bad debt and shift the cost to the insured paying for covered care.  The availability to an individual of low cost government guaranteed loans with strict underwriting standards, funded by financial institutions – not government funds, would allow and encourage immigrants to return to their country of origin for medical treatment.

 

Reuters reported that one out of six New Yorkers lacks health insurance, even though almost two thirds of these individuals are employed.  Many employers are dropping coverage or shifting costs to employees.  Few uninsured seek medical treatment until they are overwhelmed with a serious illness.  Dr. Thomas R. Frieden, New York City Health Commissioner, stated, “All of this adds up to people landing in emergency rooms with costly, devastating health problems that could have been prevented or treated.” 

 

According to Dr. Michael Horowitz of Medical Insights International, “Some 750,000 Americans sought offshore medical care in 2007, a number that is projected to rise to as many as 6 million in 2010.”  By comparison, according to Deloitte Center for Health, 417,000 foreign residents traveled to the U.S. for treatment in 2007.  That number is expected to increase by fewer than 40,000 patients by 2010.  Cost is not the only reason for change in the direction of the flow of care seekers.  Often it is quality of care.

 

In addition, Dr. Horowitz says, “It has been estimated that the global medical travel industry currently generates annual revenues up to $60 billion, with 20% annual growth.  McKinsey & Company and the Confederation of India estimate $100 billion annual revenue by 2012.  Often, this includes partnerships with large U.S. based medical institutions.  As examples, Duke Global Health Institute has medical services and educational partnerships in China, Singapore, Tanzania and Uganda; while Johns Hopkins and St. Jude’s operate facilities in Singapore.

 

This medical globalization trend will continue to increase as our population ages and the cost of health care continues to rise in America.  Dr. Horowitz correctly points out that medical, economic, political and social forces are shaping the emergence of medical tourism.  In any event, globalized medical care is huge business and will continue to grow with or without our approval or our voluntary participation.  All Americans need to hop a ride on this train!

 

We need to understand why the public looks for medical treatment outside of the U.S.  Most often it is the availability of quality care at a lower cost elsewhere.  Price advantage is, of course, a major selling point.  The cost differential across the board is huge: only a tenth and sometimes even a sixteenth of the cost in the U.S.  Open-heart surgery could cost up to $150,000 in the US; in India’s best hospitals it could cost between $3,000 and $10,000.  See Chart I.

 

However, at times the reason is as simple as an immigrant living here who wants to be near family in time of need or is comfortable returning to his or her country of origin for treatment.  Many immigrants do not see any difference between traveling out side of U.S. borders for medical care than do our own citizens that travel across state borders to receive better care or care from doctors “back home”.  Immigrants of all nations understand the medical care available in their country of origin and often prefer it.  We have approximately 8 million Green card holders in the U.S.

 

Many of our neighbors from the South would happily return to their country of origin for medical treatment if we facilitate travel between our country and theirs; and if we support insurance companies, as some are now doing, to pay for treatment outside of our borders.  Many Canadians living in the U.S. return to their country of origin for medical treatment.  Numerous self insured domestic corporations pay for care of employees in foreign locations; and most certainly, multi-national corporations generally have local employees, Americans or otherwise, treated in countries where their factories and businesses are located.  Dr. Horowitz’s figures do not include the multitude of Americans treated in other countries by virtue of location of employment.  It is estimated that there are 6.6 million Americans that live abroad.  They don’t run back to the U.S. for most treatments.

 

Hispanic Americans now account for 15% of our country’s total population.  It is notable that there are nearly fifty thousand Hispanic physicians and surgeons in the U.S.  This constitutes a base of bilingual medical professionals who can readily communicate with Latin American counterparts to coordinate care.  Many Hispanics are among the uninsured and underinsured.

 

Dallas based Christus Health, a not-for-profit Catholic system, established six hospitals in Mexico to serve Mexican residents who live in communities along the Mexico-U.S. border.  A move by all Americans to facilitate and promote cross border medical treatment would show concern for their well-being and simultaneously reduce our health care cost.

 

Many foreign hospitals have been told that American health insurance carriers plan to approve global medical care.  Our state should become the leader.  Large masses of Americans will go outside of the U.S. for health care when that happens. 

 

Dr. Robert M. Wachter, Associate Chairman of the Department of Medicine at the University of California at San Francisco, said in the February 2006 New England Journal of Medicine, “Four things seem certain: the outsourcing of health care will grow; it will challenge traditional arrangements between patients and both physicians and institutions; it will require rapid and thoughtful development of new ethical, legal and quality standards; and it will be controversial.”

 

One solution to the healthcare problem is to return to the underlying American principle of free choice.   Where Do We Start? 

1.      Require insurance companies licensed in our state to expand to global health care coverage.

2.      Develop an appropriate liability level for medical malpractice for health care outside of the U.S.

3.      Encourage and assist insurance companies to extend liability insurance coverage to patients who experience a medical malpractice overseas similar to the $1 million coverage provided by Barbados based AOS Assurance Company.

4.      Pass State and Federal legislation to allow Health Savings Accounts, Flexible Spending Accounts, Health Reimbursement Arrangements and other self-insured funds to be used on a global basis.

5.      Resolve the Hispanic issue by working with the Mexican Government, insurance companies and medical entities to encourage patients return to their country of origin for medical treatment should they want to do so.

6.      Pass State and Federal legislation to encourage banks to extend loans with a government guarantee, subject to strict underwriting rules and creditworthiness, to all seeking medical care outside of the U.S.

Chart I

Comparable Costs

Procedure	United States*	India*	Malaysia*
Heart Bypass	$130,000	$11,750	$18,500
Heart Valve Replacement	$160,000	$11,000	$12,500
Angioplasty	$57,000	$11,000	$13,000
Hip Replacement	$43,000	$10,000	$12,000
Hysterectomy	$20,000	$5,000	$6,000
Knee Replacement	$40,000	$9,500	$13,000
Spinal Fusion	$62,000	$7,500	$9,000

                                                                                                                                    * Approximate costs

 

 

Chart II

WHO Rankings

1	France	65	Uruguay	129	Peru
2	Italy	66	Hungary	130	Russia
3	San Marino	67	Trinidad and Tobago	131	Honduras
4	Andorra	68	Saint Lucia	132	Burkina Faso
5	Malta	69	Belize	133	Sao Tome and Principe
6	Singapore	70	Turkey	134	Sudan
7	Spain	71	Nicaragua	135	Ghana
8	Oman	72	Belarus	136	Tuvalu
9	Austria	73	Lithuania	137	Ivory Coast
10	Japan	74	Saint Vincent and the Grenadines	138	Haiti
11	Norway	75	Argentina	139	Gabon
12	Portugal	76	Sri Lanka	140	Kenya
13	Monaco	77	Estonia	141	Marshall Islands
14	Greece	78	Guatemala	142	Kiribati
15	Iceland	79	Ukraine	143	Burundi
16	Luxembourg	80	Solomon Islands	144	China
17	Netherlands	81	Algeria	145	Mongolia
18	United Kingdom	82	Palau	146	Gambia
19	Ireland	83	Jordan	147	Maldives
20	Switzerland	84	Mauritius	148	Papua New Guinea
21	Belgium	85	Grenada	149	Uganda
22	Colombia	86	Antigua and Barbuda	150	Nepal
23	Sweden	87	Libya	151	Kyrgystan
24	Cyprus	88	Bangladesh	152	Togo
25	Germany	89	Macedonia	153	Turkmenistan
26	Saudi Arabia	90	Bosnia-Herzegovina	154	Tajikistan
27	United Arab Emirates	91	Lebanon	155	Zimbabwe
28	Israel	92	Indonesia	156	Tanzania
29	Morocco	93	Iran	157	Djibouti
30	Canada	94	Bahamas	158	Eritrea
31	Finland	95	Panama	159	Madagascar
32	Australia	96	Fiji	160	Vietnam
33	Chile	97	Benin	161	Guinea
34	Denmark	98	Nauru	162	Mauritania
35	Dominica	99	Romania	163	Mali
36	Costa Rica	100	Saint Kitts and Nevis	164	Cameroon
37	United States of America	101	Moldova	165	Laos
38	Slovenia	102	Bulgaria	166	Congo
39	Cuba	103	Iraq	167	North Korea
40	Brunei	104	Armenia	168	Namibia
41	New Zealand	105	Latvia	169	Botswana
42	Bahrain	106	Yugoslavia	170	Niger
43	Croatia	107	Cook Islands	171	Equatorial Guinea
44	Qatar	108	Syria	172	Rwanda
45	Kuwait	109	Azerbaijan	173	Afghanistan
46	Barbados	110	Suriname	174	Cambodia
47	Thailand	111	Ecuador	175	South Africa
48	Czech Republic	112	India	176	Guinea-Bissau
49	Malaysia	113	Cape Verde	177	Swaziland
50	Poland	114	Georgia	178	Chad
51	Dominican Republic	115	El Salvador	179	Somalia
52	Tunisia	116	Tonga	180	Ethiopia
53	Jamaica	117	Uzbekistan	181	Angola
54	Venezuela	118	Comoros	182	Zambia
55	Albania	119	Samoa	183	Lesotho
56	Seychelles	120	Yemen	184	Mozambique
57	Paraguay	121	Niue	185	Malawi
58	South Korea	122	Pakistan	186	Liberia
59	Senegal	123	Micronesia	187	Nigeria
60	Philippines	124	Bhutan	188	Democratic Republic of the Congo
61	Mexico	125	Brazil	189	Central African Republic
62	Slovakia	126	Bolivia	190	Myanmar
63	Egypt	127	Vanuatu
64	Kazakhstan	128	Guyana