In case you didn’t know it already, Federal regulators shut down ANB Financial National Association banks (a.k.a “ANB”) last week after discovering "unsafe and unsound" business practices there.


If we were living in the gun-slinging Wild West as portrayed in the old John Wayne films, I think ANB (Arkansas National Bank for those who aren’t aware) could have certainly been considered an “Outlaw.”  Those who know anything at all about them today know that they were considered heroes during the real estate boom, yet in the nearly 3 years of decline since then there have been few kind words for their “aggressive” lending practices.


As a matter of fact, I have heard MANY very influential people, especially those in the banking industry, make fairly strong comments to the affect of ANB being one of the key “culprits” in creating the real estate troubles faced in Washington County today. Why?


Well for starters, because they didn’t lose $100 Million (wow) last year because their clients were writing bad checks. They lost it because they, like many others, appeared to be handing out loans like $.10 Oriental Trading Company party favors. Many in the community feel that the ANB’s of the world were fairly frivolously processing loans for too many people who had no business being in the business. And yes, there were many who did. I like to refer to it as the “$1,000,000 spec home loan on an $80,000 Income.” Looking back, it doesn’t make much sense, does it?


Personal Responsibility?

So it begs the question: can any ONE lending institution be solely at fault? Of course not. However, can any ONE lending institution be largely at fault? Who knows? But with ANB’s shut-down last week ‘smoking gun’ theories will be perpetuated, and a lot of people will say they “got what they deserved.”


It also brings up another interesting twist that many of us didn’t consider: guilt. As local commercial broker Graig Griffin so nicely put it in his recent blog post for Utah CEO Magazine, “There is no question that greed played a role in the rise and fall, but I did not expect remorse — no, this is real guilt.”  Me neither, but I guess I’m not surprised.


I think this is another “personal responsibility” issue, quite frankly, and our Nation’s economy is being torn to shreds because of the general lack of it. Everyone wants to point fingers, place blame, search for the “smoking gun.” The smoking gun is, quite simply, in the hands of the entire greedy public. We may all be to blame for the emotional wave of speculation and property appreciation, (which was largely smoke and mirrors we are finding out), that went on in recent years.


I guess we should have all seen this coming, but as I wrote in an earlier post this week, the prospect of easy money is so seductive that most people just ignore the obvious writing on the wall, or perhaps they just can’t read it?


Thankfully, FDIC will be insuring those who had deposits of less than $100k, and Little Rock’s own Pulaski Bank should be assuming all loans, but it doesn’t change the fact that a lot of people got themselves into some pretty stupid loans in the past few years.  I’ll bet a lot of starving spec builders are now wishing they would have taken the time to read the “fine print” on the walls of the real estate market some 3 years ago. What do you think?