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Helping small businesses means helping small banks, Roy Blunt says

SAINT ROBERT, Mo. (July 8, 2010) — Several local bankers and businessmen delivered a message Wednesday to Senate candidate Roy Blunt: community banks are small businesses too, and national banking rule restrictions could harm local banks as well as their customers.

Blunt, currently a member of the U.S. House of Representatives, is running for the U.S. Senate seat being vacated by fellow Republican Sen. Kit Bond and is expected to face Democratic candidate Robin Carnahan in the fall general election. Blunt has a field of Republican opponents including numerous challengers, but his closest competitors in fundraising, State Sen. Chuck Purgason from the Lake of the Ozarks area and Tony Laszacs from Pulaski County, have raised only $22,000 and $30,000 compared to $5.9 million for Blunt and $5.5 million for Carnahan.

Speaking at Lynch’s Furniture in St. Robert to a town hall meeting of small business owners, Blunt concurred with Sarah Steelman of Rolla, the former Missouri State Treasurer who previously served the 16th State Senate District that includes Pulaski County, who said access to financing is key to developing small businesses.

“The community and independent banks are the ones that have borne the brunt of the big bank’s problems and that translates into affecting small businesspeople who can’t get credit,” Steelman said.

Don Mayhew, a surveyor and engineer from Crocker who was previously the elected Pulaski County Surveyor and Crocker R-II School Board president, asked Steelman for suggestions.

“What kind of solutions were you thinking about, Sarah?” Mayhew asked.

Steelman suggested microfinancing for small businesses “so people can more easily get credit without having to put up more collateral,” and Blunt said one way to accomplish that is by freeing up rather than restricting small local banks whose bank managers know their customers.

“I think there should be a different set of restrictions if you are keeping a loan inside than if you are packaging it to sell it out,” Blunt said. “If it’s a loan that you’ve made and you’re receiving the payments on that you’re responsible for and you’re going to be standing behind if you wind up with it, I think that’s a different category, frankly.”

Keith Pritchard of Security Bank agreed and said small community bankers are being unfairly blamed for problems caused by major national banking chains.

“There’s plenty of credit available if our regulatory structure will allow us to make good loans to good borrowers, and they’re out there,” Pritchard said. “We’re not the ones that were making subprime mortgages. We didn’t create the problem but we get to feel the regulatory burden that comes with it.”

Part of the problem comes from bank regulatory agencies, he said.

“The oversight could be common-sense oversight from our regulatory agencies to allow us to make good loans in our community where we know our borrowers and where we know our economies and allow us to turn the spigot on … without broad-brush regulatory rules and oversight coming from Washington and Wall Street that is really intended for the megabanks,” Pritchard said. “The community banks get tainted with the same brush.”

Blunt said he understands that lack of access to credit, soaring utility bills and taxes are creating major problems for small businesses.

“They’re all big obstacles and if you don’t know what the rules are you aren’t nearly as likely to play the game of free enterprise,” Blunt said. “There are lots of things that work in 10 or 15 years for sure that we don’t know where they are going to be in 18 months or 36 months, so you just decide not to go there … This is how you build a business, this is how you grow a company, this is how you build your farm.”

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