1. Standards change for the bank examiners even though these rules are not written anywhere. For instance it used to be very acceptable to maintain capital at 8% or above. Now the standard is at least 9% or 10%. Therefore instead of funding loans the bank has to build up capital. For every million dollars of additional capital required that is $10-$12M of new loans the bank cannot make.

2. Most people did not realize that last fall FDIC required all banks to pay their FDIC assessments in advance the coming years. That is millions of dollars for some banking entities.

3. When a bunch of loans go bad in an area or region then that class of loans is targeted in all areas of the country. For instance real estate development loans have gone bad in AZ and NV so here in Nebraska our banks are getting every real estate development loan examined with a fine tooth comb even though our market is still performing and there have been no delinquencies in this sector.

4. Just because some banks have an abundance of loans delinquent in a market doesn’t mean another bank from outside the area couldn’t make some very sound loans if they had room in that type of loan in their portfolio. However a hot button with examiners is “out of area” loans which just exacerbates the national market.

5. With all of the new regulations banks are forced to higher Compliance Officers and Documentation Clerks instead of new Loan Officers and Business Development experts. - it is sad.

This Administration and Congress are not making anything better or easier for “main street” America with the new Financial Regulations.

thanks again for a great article.