Georgia may be the nation's ground zero for having the highest number of bank failures-32-but state-chartered credit unions seem to be weathering the storm in good shape even as the state continues a budget-induced examiner freeze, Georgia's top regulator said Monday.
"Credit unions seem to be stable," said Robert Braswell, Georgia commissioner whose department examines both banks and CUs.
Braswell's comments came as Atlanta media reports over the weekend focused on the drop in the examiner force amid budget reductions ordered by Gov. Sonny Perdue.
The Georgia Department of Banking & Finance currently has 61 examiners, a drop of six over the past two years in positions that are going unfilled "though that is something we would love not to have happen," said Braswell.
In weekend articles, the Georgia Bankers Association questioned the wisdom of the state's timing in having fewer examiners when community banks continue to be under financial duress. Joseph Brannen, president of GBA, said "the answer is no" as to whether the state should be running with fewer examiners.
Braswell said many of the Georgia banks that failed over the last two years got into trouble over land development and construction loans, including real esate loans. Georgia's 64 state-chartered CUs "did not have the lending parameters to make those kinds of loans," said Braswell and "that's a Godsend."
Referring to the bank problems, one Atlanta lawyer, Walt Moeling, told the Associated Press that if the state had spent adequate money on banking oversight, "the present crisis we've had in the banking system may not have been so strong" labeling the phenomenon "deregulation through attrition."