Wright and Ortiz: Don’t Let Silicon Valley Bank’s Financial Catastrophe Spill Over to These Crucial Banks

SANTA CLARA, CALIFORNIA - MARCH 10: People line up outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. …
Justin Sullivan/Getty Images

Earl Wright and Alfredo Ortiz write for foxbusiness.com warning against overzealous regulation of community banks in the wake of the Silicon Valley Bank failure because they offer the majority of small business loans and an even greater proportion of farm loans:

The federal response to the ongoing banking crisis may end up having a big impact on the nation’s smallest banks that bear no responsibility for the turmoil. Community banks have an outsized impact on local economies throughout the country, so hamstringing them with new costs would have broad consequences.

. . .

Community banks provide roughly 60% of all small business loans and more than 80% of farm loans. Small banks also stepped up to deliver pandemic-era Paycheck Protection Program loans while many big banks dragged their feet. They serve rural America; approximately half of community banks are located in counties with fewer than 50,000 people.


Please let us know if you're having issues with commenting.