Wednesday, December 8, 2010

Ruthless Banker Potter Saves Bedford Falls from Subprime Lender George Bailey

BEDFORD FALLS, N.Y. -- Two more financial institutions were closed in November by federal regulators, bringing the total number of U.S. failed banks this year to 143, the Federal Deposit Insurance Corporation said. Allegiance Bank of North America  was the most recent casualty of 2010. More surprising was the announcement that officials had seized the assets of and shuttered the Bailey Savings & Loan in Bedford Falls.

The example of George Bailey, the kind-hearted and altruistic proprietor of Bailey Savings & Loan, provides glaring proof of how good intentions so often pave the way to Hell.

Town on the Verge of Economic Collapse
For years, the quiet and unassuming town of Bedford Falls has had only one source of contention -- the rivalry between generous lender and lenient collector, George Bailey, and the miserly millionaire banker, Henry Potter. By all accounts, the majority of Bedford Falls' citizens consider Potter an unrepentant villain. Potter himself offers no apologies and openly criticizes Bailey for his lack of business acumen and lax lending standards.

"It's cliche, but I'm misunderstood," Potter said. "The bucolic people of this town have no concept of legitimate business or how I'm trying to save their miserable nest eggs. George Baily is a reckless subprime lender. That's the long and short of it."

As sobering and stark as Potter's opinions might seem, he makes a valid argument in appealing to the town's consumers to reconsider the financial lessons learned over the last eight years, and to stop dwelling on the sentimental.

"I don't even hold George solely accountable," Potter went on. "He learned everything about business from his father. Both men had never attended a college, let alone pursued advanced degrees in finance. Peter Bailey was not a businessman. That's what killed him. Oh, I don't mean any disrespect to him, God rest his soul. He was a man of high ideals, so-called, but ideals without common sense can ruin this town. Now, you take this loan here to Ernie Bishop. You know, that fellow that sits around all day on his brains in his taxi. You know, I happen to know the bank turned down this loan, but he comes to Bailey and they're building him a house. Why?"

When asked about this loan, Bailey responded, "Well, I handled that. Potter has all the papers there. His [Bishop's] salary, insurance. I can personally vouch for his character."

Potter scoffed at the idea that character assessments measured up against real collateral. "You see, if you shoot pool with some employee here, you can come and borrow money. What does that get us? A discontented, lazy rabble instead of a thrifty working class. And all because a few starry-eyed dreamers like Bailey stir them up and fill their heads with a lot of impossible ideas."

Given the absence of sufficient regulatory oversight, a situation that has worsened exponentially since the 1990s, Potter has now emerged as a sole voice of reason in a town perilously close to over-leveraging itself.

Following last month's news of the additional bank closures, the Federal Reserve insinuated that it might be considering Henry Potter for a possible position in the administration. With Republicans now in charge of the House of Representatives, and with President Obama in the mood to make deals with the conservative factions in Congress, Potter's seat in the Reserve seems almost assured. A large number of Bedford Falls' residents, many of whom previously ranked among Potter's harshest detractors, have now come out in support of this decision.

Late Tuesday afternoon, local police reported that George Bailey was taken into protective custody after a failed suicide attempt. Bailey told detectives that with his life insurance policy, he was worth more dead than alive. Unfortunately, and due in large part to his gross mismanagement of funds, his policy's value had depreciated significantly. It is now estimated at around $15,000, barely enough to purchase a decent casket from Walmart.

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