Local bankers are reassuring customers that their money is safe.
The subprime mortgage crisis has led to a jittery Wall Street, but it is a Wall Street problem and not a Main Street problem, two local bank officials said Wednesday.
"It certainly has been a volatile situation in the last week or so," said Jamie Reynolds, senior vice president of NBT Bank.
On Wednesday night, the U.S. Senate approved a modified version of the $700 billion financial industry bailout.
The rescue plan failed to pass the House of Representatives on Monday, but the Senate's version includes the raising of the Federal Deposit Insurance Corp. bank deposit insurance coverage from $100,000 to $250,000 per customer.
"There's been no inflationary increase in that since its inception," Reynolds said. "It's certainly overdue."
The House is expected to vote on the Senate version Friday.
In a message for callers left on his voice mail, Wilber Bank President and Chief Executive Officer Douglas C. Gulotty reassured customers their money is safe.
"The bank is sound and well-capitalized," Gulotty's voice mail said, adding that Wilber is positioned to endure virtually any crisis.
Later, during a phone interview with The Daily Star, Gulotty said the subprime crisis, prompted by risky loans and plummeting house values, has not been an upstate New York problem, Gulotty said.
"This did not happen to a great extent in upstate New York at all," he said. "Every community bank in upstate New York missed out on the trouble."
Community banks are not investment banks and have "kept it simple," Gulotty said. "You learn early in life not to buy things you don't understand."
Oneonta-based Wilber Bank has recently seen 10 percent growth in deposits in its home area, Gulotty said.
"That money is as safe as it's ever been," Gulotty said. "We don't have a liquidity problem."
Wilber has issued $29 million in loans to 328 borrowers within the last year, Gulotty said. "There is no credit crunch if you go to your hometown bank."
Norwich-based NBT Bank has also seen its share of success, even as large national banks have foundered.
The bank's stock has hit two 52-week highs in the last two weeks, Reynolds said.
"Certainly, we're still lending money," Reynolds said. "We don't have capital issues."
If people have questions about their deposits or loans, they should feel free to talk with their local banks, Reynolds said.
Oneonta resident Rick Guerrero said he is not concerned about local banks taking a hit.
"I feel very safe with NBT," Guerrero said.
His wife did have an account with Washington Mutual Savings Bank but closed it before the bank collapsed and was sold to JP Morgan Chase, Guerrero said.
Washington Mutual was at one time the sixth-largest bank in the country.
Reynolds said it is less clear what the crisis may mean for the overall economy in the long term.
"There is no crystal ball," Reynolds said.
Gulotty, who met with Federal Reserve Bank of New York officials during the day Wednesday, said the government has done a poor job of marketing the financial rescue plan to the public.
Gulotty said the plan may not be perfect, "but it's better than nothing at all."
The Federal Reserve officials are forecasting that consumer spending growth will likely be negative in the last financial quarter of the year, which began Wednesday. Manufacturing growth has been positive, but is losing momentum; inflation is a concern; and unemployment is a concern depending on where you live, Gulotty said, recounting the meeting.
"They are still worried about home prices," Gulotty said.
But he added that home prices are stable in a lot of communities in upstate New York.
"It's a pretty normal recession if you take out the bank crisis," Gulotty said.
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