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September 18, 2008 3:02 am

Powell bankers say don't panic

Written by Tribune Staff

The nationwide financial crisis, which, according to analysts may be comparable to the Great Depression, continues to worsen.

What began with a national slump in housing prices has evolved into a financial nightmare for many. Following on the heels of a federal bailout of mortgage giants Fannie Mae and Freddie Mac, the weekend news of Merrill Lynch's sale to Bank of America and a bankrupt Lehman Bros. dealt consumers another blow. And on Monday, the Federal Reserve announced that it would come to the rescue of insurance behemoth AIG — to the tune of $85 billion — to prevent what could be a catastrophic, world-wide domino effect if the company failed.

The turmoil has people in Powell asking, “What does this mean for me?”

Local bankers said people should not panic.

Larry Larsen, president of the Powell branch of Shoshone First Bank, said local customers are aware of the problems and have approached him with “concerns about FDIC insurance and the amount available for their money.”

The FDIC insures deposits up to $100,000.

“We have brochures at the bank with all the information. We just want (customers) to know our bank is safe and sound. We'll give them our balance sheets and financial information. They can also access some of the information online. (We want to) give them a comfort level,” Larsen added.

The branch manager of the Bank of Powell, Denis Brothers, agreed, “A lot of customers come in and have concerns because of what they hear on the national news. The fact is, local banks didn't participate in those kinds of activities. There's no reason to wonder about the safety of Wyoming banks. (The majority of questionable mortgage loans) involved investment banks, big banks — we just don't do business like that.”

However, Brothers said the crisis is affecting the mortgage practices of local banks.

“The mortgage business is adopting new rules, probably as we speak. It's generally made mortgage lending more difficult. Minimum credit scores and down payments have risen,” he said. “It (mortgage lending and borrowing) has become a bit more difficult.”

Larsen added, “It's not a huge problem on the local level. We just need to ride out the storm.”

Other local bankers could not be reached for comment.