Coloradoan: Bennet Discusses Jobs, Economy

News Article

BY Pat Ferrier

Rick Judson needs to expand his 17-year-old company, Peddle Master Inc., hire a dozen or more workers and increase his marketing.

"We need to get the word out ... people don't even know we're here," Judson said Monday during a roundtable discussion on jobs and the economy with U.S. Sen. Michael Bennet at the Loveland Chamber of Commerce.

Peddle Master, which makes hand controls for disabled drivers, can't expand or add new jobs without additional capital, "but we're so far upside down no one will even talk to us."

Like many other businesses in days of easy credit, Judson has been running the business on high-interest credit cards. He's thought about shutting the doors more than once. "But then someone will call and thank me for what we do, so I keep going," he said.

Bankers, frustrated by tightening federal credit regulations, and businesses discouraged by their inability to borrow money appealed to Bennet to make changes in Washington by easing the flow of capital either through community banks or federal agencies such as the Small Business Administration.

Bennet sits on the Senate Committee on Banking, Housing and Urban Affairs considering financial reforms for Wall Street.

"As we think about what will happen with Wall Street, we have to be thinking about Main Street," said Bennet, who was making the rounds Monday during the congressional recess.

"Small business continues to be frozen out of the credit market," he said. "As long as credit is frozen, small businesses will have a tough time creating jobs."

Small businesses and start-up companies are paralyzed by uncertainty surrounding future costs of health insurance, interest rates and the difficulty getting capital, said Harry Devereaux, CEO of Home State Bank. They are hunkering down trying to get out of debt, paying down loans and holding off on new borrowing, he said.

That hurts community banks, which help fund about 80 percent of small, local businesses.

Nationally, bank executives say examiners are downgrading the ratings of performing loans simply because the collateral - typically, commercial real estate - has fallen in value. And they're making banks exceed the minimum levels for capital and bad-loan reserves. Those practices, they say, fail to consider banks' familiarity with their communities and borrowers. And they constrict lending.

Federal banking officials acknowledge that examiners are more vigilant in light of the lax credit standards that triggered steep downturns in housing and commercial real estate and a continuing rise in the number of loan defaults and bank failures.

Since early 2009, 177 banks have shut down, including Greeley's New Frontier Bank, and more than 700 are on the FDIC's "problem bank" list. Commercial real estate - which makes up nearly a third of community banks' loan portfolios - continues to be plagued by rising vacancies and plummeting value.

That puts small businesses in a holding pattern, unable to expand and grow jobs until lending loosens.

USA Today contributed to this report.

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