JUDY WOODRUFF: We get a response on all of these matters now with Steve Bartlett of the Financial Services Roundtable. His group lobbies for and represents most of the banks that were at today’s meeting.
Steve Bartlett, good to have you with us again.
STEVE BARTLETT: Judy, good to be with you.
JUDY WOODRUFF: So, now you have not only the president of the United States, you have got a lot of small business people in Colorado, as we just saw in that report, saying the banks are not lending; they’re hurting small business.
STEVE BARTLETT: Well, obviously, the banks are lending. Our banks get up every day to try to figure out how to make a good loan, make more loans, make more of them and provide more lending. And we’re doing that.
The fact is that loan demand is down. Every survey would tell you that. The National Federation of Independent Business came out with a survey last week, the Federal Reserve.
So, what’s happening is — and I’m a — I have been a small business man all of my life, actually. So, I have been on both sides of the picture. I have never met a small business man who applies for a loan that doesn’t think that he or she is qualified. And so I understand that.
The fact is, is you have to do it one loan at a time and make sure it’s a good loan. And that is what we communicated to the president today. We’re setting out to look for ways to make more loans, to increase business lending, but we’re not going to get back into that old habit of making bad loans.
And I know that that isn’t what the president is suggesting, but we want to make more good loans. We offered some suggestions and some ways that we can do more of that and, of course, SBA and the government can also.
JUDY WOODRUFF: What are some of those suggestions?
STEVE BARTLETT: For example, the SBA, they had a 90 percent guarantee.
JUDY WOODRUFF: That is the Small Business Administration.
STEVE BARTLETT: Small Business Administration.
They had a 90 percent loan guarantee for the first half of the year. And then the appropriations ran out, so we have suggested to extend that back up to 90 percent. On the ARC loans, you saw the suggestions from the guy in Colorado to clean up some of the paperwork.
We have suggested the same thing with the HAMP program, so you eliminate that 30 pages of back-office documentation for a $30,000 loan, and make it a more simplified, streamlined product, to make it to work.
STEVE BARTLETT: The other thing I will just tell you that we also did is, we offered and went to the president and offered this second look idea. So, if somebody thinks that they applied for a loan and should have gotten it, we will — our banks will take a second look at it. And we have increased our goals for loan production for 2010.
JUDY WOODRUFF: So, there wasn’t a second look before? Once you were turned down, that was it? Is that right?
STEVE BARTLETT: No, no, no. It’s hard to describe. There’s always a second look and a third look and there’s always competition. So, if you have four banks on a corner, then you can go to the second one.
But we’re going to make it a formal. Many of our banks are going to make it a formal process, where they will go out and say, OK, if you think you got an unfair deal, here is an appeals process, and we will take another look at it. Has to have cash flow, has to have collateral.
A loan is not capital. Without getting too much business school, I noticed that the report sort of mixed those two words. Capital is your own money. A loan is the money that you have to pay back.
JUDY WOODRUFF: Is there — there is still a disconnect, though, between the stories that — where the president said he gets dozens of letters every day, maybe hundreds, from small business people saying, I can’t get the money I need, the stories out of Colorado. And we’re hearing it from other states, of course, all 50 states, for that matter.
You on the other hand are saying loan demand is down. Help us square that circle. How do you explain it?
STEVE BARTLETT: Loan demand is way down. But an individual small business does seek an individual loan from an individual bank.
And that is competitive. There are 8,000 banks out there and 50,000 other non-bank lenders, so it is a competitive marketplace. If someone has a loan that has full cash flow and full collateral, they will be able to get the loan.
But you have to package it in a way that it makes it a good loan. Otherwise, no bank should or would take that — take a bad loan.
JUDY WOODRUFF: President Obama in that “60 Minutes” interview used the term fat cat bankers. He said: I didn’t run for office to help people like that out.
How do you and others in the banking industry respond?
STEVE BARTLETT: Well, let me just say that name-calling never really improves good communication, so I will just leave it at that.
JUDY WOODRUFF: But, I mean, does that improve, do you think, the ability to get this problem resolved?
STEVE BARTLETT: Well, the best way to solve these public problems — and we’re all in it together. We agree with the president on the need for more loans. We have suggested some ways that the government can do better and that we can do better.
And — but, mainly, it’s about the economy. So, as the economy improves, we will make more loans. But, you know, sort of public — good communication is never helped by calling names, and so I won’t.
JUDY WOODRUFF: Do you think anything will change? I mean, we have already — I guess Valerie Jarrett cited the $5 million that Bank of America is going to set aside.
STEVE BARTLETT: Five billion, actually.
JUDY WOODRUFF: I’m sorry, $5 billion, but who’s counting?
STEVE BARTLETT: Yes.
JUDY WOODRUFF: Five billion that Bank of America is — what else is going to change, do you think, as a result of…
STEVE BARTLETT: Well, I think fundamentally what changes is the recovery. So, our business is to finance the recovery. And that is what, of course, is sometimes missed in all this.
And that is that, as the banks do better and are better capitalized and are better functioning, then the recovery is financed, and that’s what we do. So, I think the first thing that changes is as the recovery picks up steam and begins to do better, then lending will increase, and it should.
But I have to say that banks are hearing the message, and we’re looking for ways to make more good loans, not lowering the criteria or the standards that you have to pay it back, but looking for more ways to make good loans.
I had one of the other banks who was in the room told me had doubled, doubled his production goals for 2010, to make twice as many good loans for 2010 as he did in 2009. So, we’re all on the same — same — with the same goal here. And we just have to keep pushing and pushing harder, doing things different, doing things better, and we will get through it.
JUDY WOODRUFF: And, just to be clear — and I also want to mention, of course, as we always do, Bank of America is an underwriter of the “NewsHour.”
But just to be clear, Steve Bartlett…
STEVE BARTLETT: They are also a member of mine, so they are…
STEVE BARTLETT: … good company, yes.
JUDY WOODRUFF: Just to be clear, are standards going to be loosened in any way as a result of these conversations?
STEVE BARTLETT: No, standards — standards will not be and shouldn’t be loosened.
And to the president’s credit, he didn’t call on us to loosen standards. A good loan is — more good loans is the answer. Any more bad loans is not a good answer.
JUDY WOODRUFF: Steve Bartlett, thank you very much.
STEVE BARTLETT: Thank you, Judy.