Roughly $185 billion in Internal Revenue Code 1031 Exchange money for real estate was processed in 2008 in the U. S.  Although, Federal Law mandates that each exchange must be executed with the services of a Qualified Intermediary, the QI’s are not audited or otherwise monitored by any federal regulatory body.

The risk of loss is great, but unnecessary if our Arizona legislature takes action.  Currently only four states have provided the leadership to regulate this process; Nevada, California, Washington State and Colorado. Colorado passed their law January 25, 2010.  See http://www.1031.org/ for information from the Federation of Exchange Accommodators.

We should move without delay to establish standards for QI’s.  Bank deposits in Arizona as of June 30, 2009 (last figures available) were in excess of $82 billion.  I believe this legislation alone, properly marketed across the U. S., can bring $12 billion to $15 billion more to Arizona in deposits by becoming a safe haven.

The defense of the QI that lost their clients $120 million dollars in Nevada by comingling personal and company monies with clients’ funds was, “There was no regulation of what could be done with the funds.”The Nevada legislature did not act to protect its citizens until after this loss.

The added tragedy is that those who have lost their funds are required to pay income tax because of noncompliance with the tax code.

Losses in Arizona have happened and more are inevitable! I personally know of a bank that was approached with an offer to use client money as collateral for personal loans for the owners of a QI.  Absolute power over money corrupts.  We don’t need to wait until after the fact to regulate.

In December 2008 the QI of LandAmerica filed bankruptcy with over $400 million of consumer funds. The monies are now in limbo and may never be seen again due to commingling and improper investment under LandAmerica’s control.

Arizona consumers, inundated with a flood of downward economic trends, should not have to include real estate entrusted to Qualified Intermediaries that due to a lack of both federal and state legislation are riddled with intentional and unintentional fraud. QI’s are not required to be bonded, insured, or even licensed. This regulatory void has left unscrupulous and incompetent QI’s with doors wide open for malpractice or outright fraud. Your money becomes their money to do with as they wish!

Arizona must move quickly to become the fifth state in the nation to bring regulation to this important business function. Our state could be seen as a safe haven and a home to billions of dollars of 1031 exchanges bringing relocations, assets, tax revenues and jobs to Arizona.  Funding will be needed for the Arizona Department of Financial Institutions to oversee this industry.

Elimination of state income tax will give every Arizonan an annual pay raise of $3,000 to $6,000 - an increase in total per capita personal income annually of $19 to $38 billion, plus allow us to keep income tax dollars that we now regularly pay to the State.

Changing out-dated laws that determine the flow of bank deposits in and out of Arizona will help balance our state budget and transfer wealth to our citizens without picking someone else’s pocket!  Our neglect to recognize today’s financial realities has reduced tax revenues, stunted per capita income growth, eliminated job opportunities, halted economic potential and stifled capital availability for small businesses.

Nevada is 18^th in the U.S. in per capita income at $31,266.  South Dakota is 32^nd with $29,234.  Arizona is 39^th with $26,838.  Nevada beats us by $4,428 per person and South Dakota by $2,655.  These are real dollar differences that affect Arizonans’ standard of living and purchasing power.  We can give an annual pay raise to every Arizonan if we eliminate all state income tax, personal and business, as did Nevada and South Dakota. 

Financial institutions, as an example, will flock here if we put banks on a level playing field with credit unions.  Credit unions do not pay Arizona income tax.  Arizona chartered banks do.  But believe it or not, because none of the big banks are headquartered here, our local banks paid a scanty $20 million in state income tax last year towards our $12 billion budget. 

Compare the differences in the amounts of bank assets housed in Arizona, Nevada and South Dakota to see the effect of removing the tax!  Banks in Arizona held a combined $61.8 billion in deposits as of June 30, 2004.  Four years later, June 2008, the growth only reached $78.6 billion, a 27% increase, in spite of one of the greatest economic booms ever experienced by Arizona.  During this same period of time Nevada banks grew from $40.7 billion in deposits to $199.7 billion, a growth of more than 491%. 

Nevada, population 2,495,529, a much smaller state than Arizona, no longer has a corporate income tax so financial institutions raced to set up subsidiaries and headquarters in a tax haven.  They took their wealth and high paying jobs with them to Nevada.

As of June 2008, Arizona had only two locally chartered banks (both owned by out-of-state interests) with branches out of state.  They had 29 out-of-state branches that controlled $609 million out-of-state deposits.  Nevada, by comparison, had 7 banks with 3,227 out-of-state branches that controlled $286.5 billion out-of-state deposits.

South Dakota, with a population of 781,919 and one of the few states with no personal or corporate income tax, enticed a Citibank subsidiary to move there.  Subsequently, South Dakota went from $15.7 billion in deposits in 2003 to $74.8 billion in 2008, a 475% increase.  A much, much smaller state than Arizona now has nearly the same amount in deposits.  An added bonus is that South Dakota has 7 banks with 3,411 branches that control $258 billion in out-of-state deposits.

Both South Dakota and Nevada have developed extensive information about the value financial institutions bring to their respective states in the way of economic dynamics, including added taxable wages from job creation.  These states have benefited from favorable tax treatment that is an attraction to major financial institutions.  Even tiny Delaware, with a population of 853,904, has $176.8 billion in deposits and 7 banks with 1,535 out-of-state branches that control another $148.5 billion in out-of-state deposits.

The wealth controlled in the states of Nevada, South Dakota and Delaware is a phenomenal amount on a per capita basis.

Yes, we can blame some of our per capita lag on our immigration issue!  But, our problem stems more from legislative neglect of the power of receptive finance laws.  This forces our citizens to earn such a small income.  Further, our local control of bank assets has gone from 95% at the time I was Arizona State Treasurer down to 4%.  We need to keep Arizona money in Arizona!  Here our money will generate greater sales tax revenues.  Our deposit growth is currently limited and Arizona deposits are sucked out of state.  We no longer control our own economic destiny in Arizona.  Decisions are made for us by out-of-state money centers.  We can reverse this trend by providing a statutory environment that will encourage businesses and banks to headquarter here, or to move subsidiaries to our state.

We formed the Arizona Financial Institutions Task Force in 2006 to help State Senate Majority Leader Chuck Gray address bank related economic solutions for Arizona.  Senator Jim Waring has been a regular attendee.  I am chairman of the Task Force. Candace Wiest, President & CEO of West Valley National Bank, a member of the San Francisco Federal Reserve is our Vice-chair.  Our members are highly successful local business people and bank presidents.  Our mission:  To provide an independent assessment of opportunities for financial institutions to improve the business climate in Arizona.

Our Task Force believes we will act as a magnet to major global financial firms that want to locate to the U.S. as well as to out-of-state banks and their subsidiaries if we eliminate state income tax as an obligation for our locally headquartered businesses.  Financial institutions with sizable state corporate income tax expenses would trip over themselves to move their headquarters to Arizona because this change would increase the value of their charters and therefore the value of their stock.

Can you imagine the money multiplier effect we are losing by not retaining control over our own deposits?  Each dollar reproduces itself by 4 to 10 times when loaned locally.  It is like giving Arizona its own printing press.  Our state is losing out on the maximum multiplier effect that bank dollars can create while other states benefit from what should be ours.

In addition, without charging state corporate income tax, we may encourage some of the big guys that Congress is bailing out of their holes with billions of our dollars to move here.  I believe we can capture some of that money for Arizona.

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

One of the great American myths is that we have the best healthcare system in the world!  In reality, treatment is dictated by health insurance and pharmaceutical companies, potential for law suits, the U. S. Food and Drug Aministration, and a shortage of medical workers.  In addition our system is not readily available to about one third of our citizens.

Some insurance companies are beginning to recognize the value of reduced cost and improved service 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 healthcare personnel and improve healthcare service, insurance companies licensed in every state should provide coverage for medical treatment anywhere in the world. 

Participating in globalized access to healthcare 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 healthcare proposed by Congress and our President Elect Barack Obama is noble, but will clog our system badly.   Increased needs of aging baby boomers will create further strains!  Delays in treatment and inferior care will become standard unless we prepare our medical infrastructure in advance. 

Healthcare 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 healthcare 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.”  The Deloite Center for Health expects nearly 16 million to seek offshore medical care in 2015.

By comparison, according to the 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.

Medical tourism is gaining quick recognition in the United States. Although it is still quite new to Americans, the practice of traveling abroad to receive medical procedures is decades old in Europe, and has been practiced for hundreds of years in Asia.  And yet, few Europeans and Asians seek medical care in the U.S.

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 healthcare 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 healthcare cost.

According to Dr. Luis R. Leon Jr., assistant professor of clinical surgery in The University of Arizona College of Medicine and chief of vascular surgery at the Southern Arizona Veterans Affairs Health Care System, foreign-trained doctors account for one quarter of all active U.S. physicians.  The American Association of Physicians of Indian Origin states that 60,000 are from India.

Many foreign hospitals have been told that American health insurance carriers plan to approve global medical care.  Large masses of Americans will go outside of the U.S. for healthcare 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 healthcare 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 to expand to global healthcare coverage.

2.      Develop an appropriate liability level for medical malpractice for healthcare 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.

7.      Email the White House and Congress with your opinion.  http://www.whitehouse.gov/contact

https://writerep.house.gov/writerep/welcome.shtml; http://www.senate.gov/general/contact_information/senators_cfm.cfm

Chart I

Comparable Costs

                                                                                                                                    * Approximate costs

Chart II

WHO Rankings

Other than with the grand jury system, open, public preliminary hearings and the right to legal representation are required in the United States as basic principles of justice. Most grand jury proceedings almost always follow the recommendations of the prosecutors.  A public hearing, on the other hand, prevents a case from going to trial on the sole word of a prosecutor.

If justice is to be served, the target of a grand jury investigation must be allowed to present his or her side. The person that chooses to testify isn’t entitled to a lawyer during questioning.  The accused may be indicted by a grand jury without testifying and without having appropriate legal representation; and is essentially considered guilty until proven innocent. Besides, the grand jury’s decision to indict doesn’t have to be unanimous.

Many people of interest to prosecutors rarely know they are the subject of a grand jury proceeding and are rarely given an opportunity to present their side.  It is easy to indict when only one side is heard.  A former Chief Judge of New York State said a prosecutor could persuade a grand jury to “indict a ham sandwich.”

While in the state senate, I participated in many committee hearings; and during my tenure as an Arizona Corporation Commissioner, I took part in over 1,000 hearings.  Often I would hear one side of a presentation and wonder how anyone could refute the testimony.  Time-after-time after I heard the other side I would wonder why I had been so moved and impressed by the first party.

The United Kingdom abolished grand juries in 1933, New Zealand in 1961 and Canada in 1970.  Grand juries are today virtually unknown outside the United States.  Many of our states have now abolished the grand jury system. Connecticut and Pennsylvania abolished their use to return indictments, but retain them for investigations.

Authority for Federal grand juries to investigate non-criminal matters was abolished when the Federal Rules of Criminal Procedure were adopted in 1946.  State grand juries still have the ability to investigate civil matters.

Because power tends to corrupt, our nation needs to take a hard look at the damage our grand juries cause individuals and families, and the harm to our judicial system and to tax payers.  Grand jury power to indict should be abolished in the interest of justice and the ability to investigate civil matters should be eliminated.

From www.constitution.org:

U.S. Grand Jury Reform

The grand jury at the federal level has had a troubled history. Required by the Constitution as a check on judicial and prosecutorial abuse, it has often been used as a tool of abuse against political dissidents.  Most grand juries are mere “rubber stamps” for prosecutors, but others become “runaway” grand juries, taking the lead in investigations of official corruption and abuse.

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 investment banks were global and 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.

Recent 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 this month.

The five small Arizona community banks I helped start during the past three 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.  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.

Attached are stockholder letters from Pinnacle, Sonoran and West Valley National Banks.  These are 3 of the 5 banks I helped start in the Phoenix area.  As you can see, 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.  As you can see, 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.  Read the 3 letters and then if you have time, click on to 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.

Also, be sure to read New banks being pressured to provide business loans in the Phoenix Business Journal this week at http://www.bizjournals.com/phoenix/.  Regulators may have limited say so over big banks, but they are very demanding that small banks follow rules of safety and soundness.

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 …
See all stories on this topic

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” …
See all stories on this topic

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. …

The school drop-out rate is wreaking havoc in America.  We are rapidly falling behind educational results of other countries.Income level of a family is a factor in drop-outs.The overriding issue, however, is attitude towards education and method of instruction.  I served as Vice-chair of the Arizona Senate Education Committee many years ago.  The problem then and now starts with legislative unwillingness to pay teachers salaries competitive to what they can earn elsewhere in society.

To put our predicament in perspective, consider what I call the hard-to-believe “50 Rule”.

• The drop-out rate over a 4-year high school term approaches somewhere in the neighborhood of 50%.  In Arizona, the annual rate ranges from 8.5% to 15% depending on race.  Highest is among Native Americans, followed by Hispanics, Blacks and then Anglos.
• A drop-out rarely moves more than 50 miles from home-base.
• 50% or more of prison inmates are school drop-outs.·   The recidivism rate of ex-convicts exceeds 50%.The obvious truth is that the problem we let happen remains tucked away in our backyard forever.

When troubles arise, we either succumb or overcome. Can the problem be solved?  You bet!   I serve on the East Valley Institute of Technology Foundation Board, Mesa, Arizona, where the drop-out rate is less than 1% a year.  Why the big difference?  Results-based education!  Dedicated staff!  A student is given the vision to see the outcome of completion.  Additionally, we are able to keep some of the students in school with small scholarships ranging from $50 to a couple of thousand dollars a semester.

One of my grandsons was expelled from Paradise Valley High School at the end of his sophomore year.  It is a testament to teachers that he wasn’t expelled sooner.  I would be surprised if he ever got a better grade than a D. However, at the end of his second week in EVIT, he scored an A in math and an A-minus in biology.  I didn’t know he could read as well.  In his sixth week he and two others from his class were selected to attend an Arizona State University program where he received a $500 grant.  He graduated from EVIT on schedule.

In 2005, approximately 149,234 children were physically abused, 83,607 were sexually abused and 1,371 died as a result of abuse or neglect.  The majority were under 4 years of age.  According to CWLA, many experts believe the number of abuse- and neglect-related deaths may be much higher than the official figures.

Learn startling and disturbing national and state facts on the CWLA Web site.  See how your state stacks up in this horrible fight.

www.cwla.org/advocacy/statefactsheets/statefactsheets08.htm 

www.cwla.org/advocacy/nationalfactsheet08.htm 

CWLA lists other Advocacy Organizations helping with this horrendous problem at

www.cwla.org/advocacy/advocacyresourcelinks.htm. 

The possibilities are staggering!

There are approximately 12,000,000 illegal immigrants in the U. S. according to the Pew Hispanic Center. That is nearly 1 out of every 26 people in the U. S. There were 7,200,000 undocumented employees in the U. S. in March 2005.  The penalty for hiring an illegal can result in one of the most severe and damaging effects to a small business.  In Arizona, for example, the employer-sanctions law will revoke the license of any company caught twice with undocumented workers knowingly on the payroll.  A business with multiple locations could face a shutdown of its entire operation if one undocumented employee is found at one location.  Wal-Mart was fined $11,000,000 because their cleaning contractors hired illegal workers.

This is a staggering, wide-spread, monumental, out-of-control problem! Phony records to convince an employer, such as a Social Security card, can be purchased for $50. The media reported in June of 2007 that the Social Security number of a young woman in California is being used by at least 81 people in 17 states to get work. The Social Security Administration was powerless to stop the practice, so they issued the young woman a new number. A 2005 report by the Federal Government Accountability Office cited that between 1985 and 2000 more than, believe it or not, 9,000,000 people got hired using Social Security number 000-00-0000.

This is a national epidemic over which a business can be destroyed.  For protection, a business must participate in The E-Verify program, formerly known as Basic Employment Verification Pilot (“Basic Pilot”), to determine employment eligibility of all newly hired employees.  It is administered jointly by the Department of Homeland Security through United States Citizenship and Immigration Services and the Social Security Administration. Visit the USCIS Web site: https://www.vis-dhs.com/EmployerRegistration.

Sinners and Saints and www.uscriminalrecordsagency.info, our affiliate, are not in any way connected with the Federal program.

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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 investment banks were global and 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.

Recent 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 this month.

The five small Arizona community banks I helped start during the past three 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.  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.

Attached are stockholder letters from Pinnacle, Sonoran and West Valley National Banks.  These are 3 of the 5 banks I helped start in the Phoenix area.  As you can see, 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.  As you can see, 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.  Read the 3 letters and then if you have time, click on to 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.

Also, be sure to read New banks being pressured to provide business loans in the Phoenix Business Journal this week at http://www.bizjournals.com/phoenix/.  Regulators may have limited say so over big banks, but they are very demanding that small banks follow rules of safety and soundness.

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. …