Local banks doing well
The recent financial crisis was exacerbated over concerns that a $700 billion financial rescue package that would allow the federal government to buy mortgage-backed securities would not be passed by Congress.
Despite several large banks going under or being sold off, banks in Detroit Lakes are healthy, said one local bank president.
Midwest Bank's Stephen Daggett said that his institution has received calls from those worried about their deposits.
"We've had phone calls about FDIC insurance," he said.
FDIC insurance protects bank customer's deposit in case a bank goes under.
Some of those concerns will be alleviated due to the House of Representative approving the bailout measure on Friday. The Senate approved the measure on Wednesday.
As part of the package, the limit on deposit protection will increase to $250,000 from $100,000.
Daggett also wants to reassure customers that money-market deposit accounts are also FDIC-insured.
"We're stressing to customers that we'll makes sure to see if they're insured," he said.
One concern for Daggett is fear mongering by some in the media. He said that he heard about a radio host in the Twin Cities who said that the FDIC was insolvent or, at the very least, on the verge of being so.
"The best thing that they (customers) should do is to contact their banker," Daggett said. "It's better to do that then to hear a story and assume it's correct," Daggett said.
As for recent banking struggles, Daggett said that some of it is because the industry has had a relatively successful run.
"The banking industry has had it fairly good for the past 18 years," Daggett said.
With that recent history, banks in Detroit Lakes, however, are relatively insulated from national issues.
Midwest Bank, Daggett said for example, as well as all the other banks in town, are designated to be well capitalized, the highest rating banks can receive from the federal government to gauge their financial health.
Daggett said that his bank, along with others, didn't participate in the sub-prime lending spree that is hurting so many institutions now.
"What is happening on Wall Street is not affecting the DL area or west central Minnesota," he said.
Plus, Detroit Lakes has a strong industrial base, Daggett said.
"We have a full industrial park," he said.
High commodity prices for farm products are also helping matter.
"The farm economy is real solid," Daggett said.