Idaho banks facing tough year, says finance department

Idaho banks facing tough year, says finance department

by
Idaho Freedom Foundation staff
February 12, 2010
Idaho Freedom Foundation staff
Author Image
February 12, 2010

Idaho banks face a difficult 2010, following a down year with negative earnings, according to Idaho Department of Finance Director Gavin Gee.  Commercial banks headquartered in Idaho dealt with a high amount of foreclosed properties and other effects of the recession, according to Gee.  "Our Idaho financial institutions are caught in an economic upheaval that they did not create, one caused by a culture of risk carried out by large money center institutions, not traditional lenders like those we have in Idaho," Gee told the Joint Finance-Appropriations Committee (JFAC) Friday morning.

Gee said his department, which regulates banks and other financial institutions, has also taken spending reductions. He said his staff has taken seven unpaid furlough days due to tightening state finances. “Obviously this comes at the worst time for us,” he said. The department's $5 million annual budget doesn't come from the state general fund.

Last year, 140 banks failed across the U.S., but Idaho only had one bank failure, the First Bank of Idaho in Ketchum. Sen. Dean Cameron, R-Rupert, asked Gee if he expects to see more this year. "How many institutions are on your watch list for potential problems this year?” Cameron asked.

"Without giving you a precise number," Gee responded, "I can tell you that it’s a growing number.” Gee said he could not offer any specifics due to confidentiality concerns.

“The fact that they’re growing is obviously concerning,” Cameron said.

Sen. Diane Bilyeu, D-Pocatello, asked Gee if lawmakers should pass further regulations to prevent ponzi schemes and other deceptive investing practices. “Ponzi schemes are an old scheme," Gee said. "I don’t think there’s anything you could do to protect them. They’re a popular fraud.” He said better enforcement, not better laws on the books, will prevent further bad practices. “We as regulators just need to do our job as regulators and law enforcement.”

Read the Idaho Department of Finance's news release on Gee's fourth quarter report and presentation to JFAC. (pdf)

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
COPYRIGHT © 2021 Idaho freedom Foundation
magnifiercrossmenucross-circle
>
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram