AUGUSTA, Maine — Maine banks and credit unions said Monday they’re financially healthy and ready to talk to borrowers as they addressed a legislative committee trying to assess how the state’s financial services industry and businesses are faring amid the world economic crisis.
But businesses expressed some frustration about getting capital as they spoke to the Committee on Business, Research and Economic Development. The lenders said they have money available and encouraged potential borrowers not to be discouraged by relentless news of economic crisis.
“All of our banks are well-capitalized, safe and sound, willing and able to lend,” said Mark Walker of the Maine Bankers Association.
“It’s a very competitive market. It’s a good time to seek competitive rates and bids from your banks in your communities. It’s a good time to go seeking a loan,” Walker told the committee. He also said that despite the Maine banks’ status, borrowers shouldn’t be lulled into a false sense of confidence.
The Maine Credit Union League said there even has been significant growth in first mortgages and refinancings.
“In Maine what we’ve been hearing from our credit unions is that more or less it’s been business as usual” in terms of credit requested and credit extended, said the nonprofit cooperative’s Quincy Hentzel-Germann. She said the credit unions have more than $700 million in liquidity available to their members.
The 21-member Maine Association of Community Banks’ Kathy Keneborus said that during the three months ending in September, mortgage lending within the organization’s membership was up, while business loans were down.
“I would like to encourage anyone considering a loan to visit a bank,” said Keneborus.
The lenders all attributed the health of Maine financial institutions to the fact that they are well-regulated by state and federal agencies and engage in prudent lending. They reported no retrenchments in their industry in Maine.
But some business representatives said capital is not flowing as freely as portrayed.
James Monroe, president of MIDCorp, a precision manufacturer and supplier in Gray, said Maine’s financial industry appears healthy as it does because of credit constraints.
“They’re being very selective, so they’re very well-capitalized,” Monroe said.
Rachel Crommett of the Fifteen Mile Stream Guide Service told the committee her business has continually been denied a loan, keeping the Vassalboro hunting and fishing guide service from expanding.
“One financial institution told me that if I had applied a year ago, [the loan] would have gone through,” said Crommett. Compounding the problem is that the federal Small Business Administration has scaled back on the amount of loans it will back, she said.
Christopher Speh of Maine Angels, a private equity network with $3 million in capital committed, said he foresees a continuation of the types of investments his organization arranges, but not at the same level.
“I’m not overly optimistic,” Speh told the committee.