“Non-bank lenders were responsible for originating the majority of the toxic subprime loans that were at the center of our nation’s financial crisis, but our local community banks are suffering for it, said Rep. Cliff Stearns (R-Ocala).  “70% of Florida’s community banks are under some kind of regulatory order. We are concerned that banking examiners may be pursuing an unreasonably tough analysis of Florida banks’ asset quality and are regularly requiring downgrades of performing loans.  This, in turn, is causing our banks to restrict their lending activities, which only further exacerbates our economic crisis.”

Joined by 21 of his Florida colleagues in the House, Stearns sent a letter to Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair, expressing concern that banking examiners may be pursuing an unreasonably tough analysis of Florida banks’ asset quality and are regularly requiring downgrades of performing loans.  He requested that the agency apply a measured approach in their banking examinations and refrain from making arbitrary decisions in their conduct of safety and soundness examinations of community banks.

A PDF copy of the letter is attached.