BusinessReport.com

The nation’s intensifying financial crisis has confused and panicked consumers calling banks again to make sure they’re money is safe, but area bankers say it’s bank-to-bank lending that has Congress worrying about a credit freeze stalling the economy. “Loan growth is up in Louisiana,” says Bob Taylor, CEO of the Louisiana Bankers Association. “What’s happening on Wall Street in completely divorced with what’s happening in Louisiana.” Taylor says it’s an investment bank problem, but consumers just heard “banks” and panicked. Local banks are sound because they’re regulated, unlike investment banks, which deal more in stocks and are not FDIC insured. Still, he says area banks are reassuring fearful customers and ensuring their money is fully covered. It’s working, Taylor says, because no one has reportedly pulled his or her money from a bank. Collectively, bankers also are trying to clear up the public confusion. “Louisiana banks are well capitalized and don’t need those investment banks to do what we do here,” he says.

John Ducrest, commissioner of the Office of Financial Institutions, agrees they’re educating consumers that Louisiana banks are in good shape because they used sound lending practices. “Lending was up 4% in the last quarter, so our banks are lending money. Commercial lending is still healthy here,” Ducrest says. “The overall condition of banks in Louisiana is excellent with strong capital bases and funds to lend.” An estimated 13% of loans in Louisiana were subprime, and the state ranks 43rd in the nation for foreclosures despite the destruction of hurricanes Katrina and Rita.—Anna Thibodeaux