From midnight press conferences in
Washington, D.C., to the checkout line at the grocery store, talk has been
laser-focused on the country's financial situation. Older Americans
recount episodes from the Great Depression. Others recall vividly the long
lines and gas shortages of the 1970s.
Economic crises are not new, but each
new one brings stress and concern. Local financial professionals have been
fielding calls and meeting with their customers and have some insight to
offer to the discussion.
Banks
and credit unions
Conservative policies create and
maintain stability. This is the overall message from local banking
executives.
Ricky Ray, chairman and chief
executive officer of Exchange Bank of Alabama, said he has spoken with
several customers in the last few weeks who are concerned about the safety
of their money. Ray offered assurance by reminding customers of the
federal insurance from FDIC and, more importantly, that when the bank is
sound and stable, the federal insurance is a safety net that doesn't have
to be called upon.
"We have been conducting business as
usual this week," Ray said. "We have been a stable part of this community
for nearly 100 years and have every expectation of being here for another 100 years."
At Regions Bank, management and
employees are offering a detailed flier to concerned customers. The flier
outlines Regions' diversified revenue mix and lists reasons the bank has
remained stable while others have experienced problems.
Mel Campbell, a spokesman for
Regions, said the company is well-capitalized and maintains a
"conservative approach to banking." The flier itemizes some of those
conservative steps: "minimal subprime mortgage exposure (0.1 percent of
the loan portfolio), no structured investment vehicles, no collateralized
debt obligations and no credit card loans."
Staying away from subprime lending
also is on the list of how to run a stable financial business from Monty
Hill, president and CEO of Family Savings Federal Credit Union. It is part
of the conservative message he is sharing on the credit union's Web site,
which states, in part, "Family Savings does not participate in subprime
mortgage lending or interest-only mortgage lending, two of the leading
causes for the current problems in the financial markets today."
Hill added that Family Savings
maintains a policy of lending no more than 85 percent of home value for a
mortgage.
"Loaning a person more than they can
financially handle isn't doing them any favors," Hill said.
Wealth
management
Velda Eugenias, founder and CEO of
Eugenias Advisory Group, took a proactive approach in addressing the
concerns of her clients. In a newsletter in July, she reminded clients to
view the current economy with an eye to history. She said, "We've been
through many different cycles in the economy and at the time they all seem
overwhelming to us."
Eugenias is hearing concerns from
some clients that they may have to postpone their retirement plans by a
few years to have the financial security they need. She has been reminding
clients that wealth management is "all about good asset management and
asset timing and being diversified."
Her outlook for the future is solid.
"This is a time of change in the
economy," she said, "but I continue to have faith in our country and its
people."
Real
estate
Much of the focus of the current
economic situation centers on the mortgage industry. Lending practices and
swings in property value have left many in financial trouble.
On the local scene Jane Miles,
president of Prestige Realty, said now is a good time for those who are
financially sound and looking to buy and invest.
"There is good inventory on the
market, and interest rates are down," she said. "This is a good time for
investors."
Miles also offered some advice for
sellers. For vacant homes that have not sold as quickly as the owner would
like, Miles often considers a lease agreement.
"There is a serious deficit of good,
quality homes to rent in this market," she added.
For sellers who haven't owned their
home long, selling now may not be the best, whereas leasing for a year or
two gives time for the market to adjust.
