Rich Galen

The loan portfolios have been "cleaned up" so these banks are healthy. Absent needing to comply with regulations that would make Goldman Sachs' compliance officers weep, these small banks should be ticking along happily with the officer/owners splitting their time between the bank and going to weekly Rotary Club meetings or helping mow the Little League field.

Instead more and more local bankers are heading for retirement. Why?

Again, from Robin Sidel's piece:

"Small banks received an unexpected blow this month that could drive more transactions. The Federal Reserve approved a proposal ordering even the smallest lenders to comply with comprehensive international capital requirements known as Basel III."

Many of these sales will have a depressing impact on small towns which have been struggling for years to hang on to their populations as young people go to college and head for big cities to seek their fortunes.

If a community bank is purchased by an out-of-town operation it is likely that the new managers will not be from the community thus losing decades of local knowledge about the businesses - and business people - in town.

The Little League fields will not be as neat, ads in the program for the high school Spring concert will be harder to sell, and the shopkeeper who needs a short term loan to stock up for Christmas may not get it.

President Ford never said the words, "drop dead" in relation to New York City's financial woes. In fact a few months later a compromise was reached in which the federal government provided NYC loans over a number of years until it worked its way out of trouble.

Nevertheless Ford's opponent in the 1976 election, Governor Jimmy Carter of Georgia, reminded voters of that headline and it soon became conventional wisdom that Ford had, in fact, used that phrase.

Ford lost.

Rich Galen

Rich Galen has been a press secretary to Dan Quayle and Newt Gingrich. Rich Galen currently works as a journalist and writes at