Georgia has had ʺmore bank failures than any other state.ʺ
Lynn Westmoreland on Saturday, October 8th, 2011 in a meeting
Georgia leads nation in an unfortunate category, lawmaker says
U.S. Rep. Lynn Westmoreland has made a sobering observation about his home state of Georgia in town hall meetings and to others who’ll listen.
Georgia has had "more bank failures than any other state," the Republican from Coweta County said at a GOP breakfast meeting in Newnan.
Coweta County lost all three of its banks, The Times-Herald of Newnan reported. Westmoreland believes the federal government should not have adopted the bailout plan in 2008 for some of the nation’s largest banks. The congressman believes the government should have let some of them fail and provided more support for community banks.
"These are community banks that have been around for 100 years," Westmoreland was quoted by the newspaper as saying. "We're talking generational wealth. We're talking about people losing their savings, their retirement, funds for the education of their children. All of that has gone down the drain."
The housing foreclosure crisis in Georgia has been well-documented. It began in some metro Atlanta counties about a decade ago and became a statewide problem as the impact of the Great Recession took hold in 2008. PolitiFact Georgia wondered whether the congressman was right about a similar economic impact on banks here in Georgia.
The Federal Deposit Insurance Corp. keeps track of bank failures by state. Since Westmoreland’s statement wasn’t specific about what time frame he was talking about, we crunched the numbers for several years.
Georgia had 19 bank failures this year when Westmoreland made his statement. That was more than any other state, according to the FDIC. The Atlanta Journal-Constitution reported a 23rd bank failure, Community Bank of Rockmart, in its Nov. 10 editions. Florida is second with 11 bank failures. Illinois is a distant third with seven bank failures.
Next, we went back to 2008, when the recession was at its worst and the bank bailout plan was adopted, and we counted how many bank failures there have been since then. Again, Georgia was first with 70 bank failures, according to the most recent FDIC data. And again, Florida was second with 56 bank failures.
If only it was like this in college football, Georgia fans might say.
We also decided to examine how many bank failures there have been in each state since 2006. Five years seemed like a good time span to examine bank failures. Once again, Georgia was first with a total of 71 bank failures since then.
So what’s the problem in Georgia?
Many community banks invested heavily in the real estate market during the boom years of the early 2000s. When the economy stumbled, so did those banks because the loans weren’t being paid. Most of Georgia's failures came after the banks crossed below a certain threshold for capital after those loan losses, the AJC has reported.
The banks in Georgia lost less than Florida and other states such as California. Those failed Georgia banks had fewer assets than those in California, Florida and Illinois.
Westmoreland was not talking about the size of those bank failures when he spoke in Coweta County. The congressman said bank failures. Therefore, we rate his statement True.