Interesting follow-up to Friday’s failure of Venture Bank via the Tacoma News Tribune: Some banks in state risk failure
The best news to derive from Friday’s announced failure and sale of DuPont-based Venture Bank came in the form of a report from a Seattle TV and radio station.
But the news – that no other banks in Washington were in trouble and facing closure – was very wrong.
I believe that the remark above is referring to this report from KOMO news, which contained the (false) claim that “as of right now, there are no other banks in financial trouble in the state.”
Yes, Venture did fail.
But yes again, in fact, there are other banks in the state that might also fail.
Scott Jarvis, director of the state Department of Financial Institutions, said Monday that he thinks he knows how that incorrect information was relayed to the public.
“The consumer reporter called Brad,” Jarvis said. (That would be Brad Williamson, head of banks at DFI.)
The reporter asked if any other banks were in trouble. Williamson – on Friday evening – answered, “We are not closing any more banks this week.”
“Somehow that got translated for the 11 o’clock news that there are no other banks in trouble,” Jarvis said.
“The truth is that we did not close any more banks on Friday,” he said.
And he continued, “There is considerable strain on our banking system attributable to the expansion we had in commercial real estate growth.”
With Ben Bernanke out there claiming that “the recession is very likely over,” it will be interesting to see how many more local banks continue to fail under the continued financial stress of non-performing construction loans.
(C.R. Roberts, Tacoma News Tribune, 09.15.2009)