Banking Law

The steady stream of complaints about banks sitting on their money and not making loans to credit-worthy borrowers was temporarily dammed up recently by a diverting report out of Kansas City, Missouri. It appears that in some cases, banks are not lending to those with good credit scores, but to those whose scores are a negative number. Why? Out of the goodness of their hearts, that's why.

Loan officers at the First National Bank of Kansas City defended their decision to lend local man Tim Creamsby $650,000 to open a small stationery store Monday, explaining that, while the business's long-term prospects were poor, the idea was "simply too pathetic and heartbreaking" not to sign off on.

"In order to qualify for a loan of that size, an applicant normally must demonstrate significant financial holdings, have an impeccable credit score, and fill out a number of contracts," First National loan officer Robert Lewiston said. "But when I met Mr. Creamsby and listened to his pitiful story about how he'd worked all his life at an office-chair factory to save up for his dream?his dream to have a little shop where people could buy thank-you notes and maybe pick up some fountain-pen ink every now and then?well, I blurted out the first number that came to mind just to make him stop."

"You see, he had these little drawings of what the storefront would look like," Lewiston added. "Tiny little sketches he drew himself. Christ, that almost did me in."

[...]

Several factors reportedly contributed to their generous offer, most notably having to watch the kind-faced old man pull from his pocket a small, dog-eared slip of paper?worn soft as felt from years of repeated handling?on which he had written a number of potential store names, including "Notable Notes," "The Jottery," and "Creamsby's Sheaves."

"I was about to suggest that he consider a more practical business, like a coffee shop or a hat store, but then he brought out that list of names," bank vice president Nathan Bergeson said while attempting to remove some dust that had gotten into his eye. "I think the bank's going to have to eat this one."

Heartless bankers? Not in KC, MO.

And while we're at it: did you hear that the Obama Administration has rebranded toxic assets as legacy assets? No, really, unlike the previous story, that's not an April Fool's joke, although it IS fairly amusing. At least, John Stewart thinks so (h/t BankThink).