Bailouts of banks, investment firms and insurance companies dominated national headlines last week.

Polls show most Americans are not in favor of these actions as reported on www.rasmussenreports.com, which said only 7 percent of voters believe the federal government should use taxpayer money to keep a large financial institution solvent and 65 percent say let the company file for bankruptcy.

How will the action by the U.S. government affect Teche Area residents?

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Benny Menard, president of Community First Bank, said he is trying to gather information about all that has happened this past week.

“Here we are as community banks, the backbone of the local financial community, doing everything right, making sure we are making good, credit-worthy decisions,” Menard said. “These larger banks that have made all of these bad loans are getting bailed out, and it’s really not fair to the community bank shareholder.”

On the other hand, he said he does realize the big play of the financial market in relation to the entire market. However, he said the taxpayer will be the one to pay for the bailouts.

“These actions will probably help out people with portfolios, but at what expense to the taxpayer?” Menard said. “The hard-working American, the hard-working people in Iberia Parish working paycheck to paycheck will end up paying for this thing. There will be big tax consequences to take care of this that will probably be felt the most by small companies and blue collar working Americans.”

Patrick Little, president and CEO of Teche Federal Bank, said the big investment banks that grab national headlines for bailouts do not do the same kind of business as “Main Street bankers.”

 “They don’t take in federal insured deposits, offer checking accounts or anything like that,” Little said. “And, what’s going on with these big institutions is really far removed from what smaller community banks really do.”

Little said the area economy is good with a strong oil and gas industry, low unemployment figures and continued business expansion.

“We continue to do all the things we have been doing that have kept us a good place to do business for many years and are largely unaffected by these big investment firms,” he said. 

The words “credit crunch” have been included in one national headline after another but Little said Teche Federal Bank had a record lending year this year.

“We continue to make good home loans and good business loans and those are just the sorts of things that are our normal business,” he said.

Menard said he has seen more restrictions on mortgages but believes they are rightful restrictions.

“You should have to have the right credit to own that house,” he said. “It’s not that these good people were wanting a home and couldn’t afford it, it’s just that mortgage brokers were putting them in homes they couldn’t afford. It’s really good news that mortgage restrictions have tightened up.”

As mortgage lending becomes more regulated, Menard said he fears banks in general across the nation will begin to be more regulated, which he believes will definitely have a ripple effect on customers.

“I don’t know where all this is going,” Little said. “But, it sure seems like the government is getting real involved in all sorts of businesses, and I don’t think that will be a good thing in the long run.”