AUSTIN - With the U.S. Congress on the verge of passing a Wall Street bailout bill, what repercussions lie in store for America remain to be seen.
Reports of troubled financial markets cause uneasiness or cast gloom. Here in Texas, however, there appears to be a bright spot despite the financial turmoil.
The outlook for Texas-based banks is strong, members of the Independent Bankers Association of Texas reported during the group’s 34th annual convention Sept. 20-23.
Surveys conducted among the membership of the nation’s largest state community banking organization showed that member banks are well capitalized and in good financial shape.
“Texas community banks did not participate in the exotic mortgage frenzy that created so much havoc across the nation,” IBAT chairman Cliff McCauley said. “They stayed pretty much with the types of lending they have done for years, to local consumers and small businesses.”
A small percentage of Texas-based banks will experience some losses related to the financial crisis, but the survey showed that none will be damaged significantly.
McCauley said the Texas economy is still strong and people still want to live in the Lone Star State. “Job growth, tax revenues, new construction, home sales - while no doubt impacted by the overall slowdown in the national economy - are still the envy of the rest of the nation.
“Many of our members see an increase in business opportunities as consumers seek stability and the comfort of doing business with someone who knows them and actually cares about their financial well-being,” McCauley said.
The Independent Bankers Association of Texas represents some 2,000 Texas domiciled banks and branches. McCauley is executive vice president of San Antonio-based Frost Bank, with 91 branches throughout the state.
Hurricane recovery forges ahead
Now, more than two weeks since Hurricane Ike tore through Texas Sept. 13-14, we’re still in the early stages of recovery. Ike claimed 27 lives in Texas and damages may reach $35 billion.
Repair, debris removal and salvage crews are hard at work. Aerial spraying for mosquitos is under way. But in hard-hit Galveston, water and electrical services are not fully restored.
FEMA and HUD are helping displaced Texans find temporary housing and the Department of Labor approved a $16 million federal grant to fund 600 temporary positions to assist in clean-up and recovery efforts.
On Sept. 23 in Washington, D.C., Lt. Gov. David Dewhurst testified before a U.S. Senate subcommittee on disaster recovery. After acknowledging that Texas was granted 100 percent federal cost share for evacuees for 30 days, Dewhurst said, “Senators, 30 days is a real hardship. The city of Galveston with 57,000 inhabitants, the city of Orange with more than 18,500 inhabitants, plus other heavy impact areas, are wiped out.
“Most homes and businesses have been damaged. Most electricity remains out. Most water and treatment facilities are damaged. Most sewage service and treatment facilities are down.
It is estimated to take up to six months to make Galveston, Orange and other heavy-impact areas totally habitable. Texas respectfully asks that Individual Assistance be extended until the heavy impact areas are rebuilt and totally habitable. Again, treat us as Louisiana was afforded after Katrina.
Insurers win in Sunset vote
At a Sept. 24 meeting of the Texas Sunset Commission, lawmakers deadlocked on a proposal to require the state’s five largest insurance companies to wait at least 30 days before raising rates on homeowners’ insurance.
The deadlock translates to a win for insurance companies, so they will be able to increase rates without approval from the state of Texas. The proposal requiring a waiting period to raise rates was made by Sen. Juan “Chuy” Hinojosa, D-McAllen, who noted that Texans pay the nation’s highest rates.
Evidence preservation is topic the collection, storage and preservation of evidence were discussed at a Sept. 25 meeting of the Texas Criminal Justice Integrity Unit. State Rep. Jim McReynolds, D-Lufkin, said he is concerned about wrongful convictions and the need for proper storage of biological evidence.