Freedom Bank was founded two decades ago in Montana’s Flathead Valley, an area well known for fly fishing and whitewater rafting that is a world away from Silicon Valley.
The community lender has built its business by catering to locals, offering a mix of mortgages, car loans and commercial loans from its home base in the tiny town of Columbia Falls.
It’s a business model far different than Silicon Valley Bank’s, which grew aggressively by focusing on tech entrepreneurs. Freedom’s balance sheet is measured in millions, not billions of dollars.
Yet Freedom Bank and other community banks are growing worried they will now have to help pay for the rescue of Silicon Valley, as well as New York-based Signature Bank, after regulators last month took the unprecedented step of backstopping all deposits at both lenders.
It was a move that helped stabilize the banking sector, but it was one that came with a hefty price tag: $22 billion.
The Federal Deposit Insurance Corp (FDIC) now needs to recover that cost. It plans to impose a “special assessment” on banks but has yet to decide which lenders will need to pay that fee.
Don Bennett, Freedom Bank’s CEO, believes strongly his bank should not be on the hook.
Read more at NPR.org
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