Community bank to be proposed Institution could finance projects

January 28, 1993|By Katherine Richards | Katherine Richards,Staff Writer

Carroll County may have a community development bank "on its feet by this spring," the Carroll County Economic Development Commission was told yesterday.

William Jenne, administrator of the county Economic Development Office, said that, after several months of work, he hopes to present a proposal for a community development bank to several local commercial banks by the end of this week.

"Our first goal is to capitalize this organization to the tune of $500,000," he said. That would allow the community development bank to finance four to eight deals this year, he said.

A community development bank would help local businesses get loans that federal regulations now prevent commercial banks from making.

For example, Mr. Jenne said, a local person might want to buy an existing, profitable business, only to find that regulations prevent banks from lending more than a certain percentage of the needed money.

A community development bank could step in and fill the gap, providing the balance of the money.

Robert A. "Max" Bair, executive assistant to the county commissioners, said creation of the bank could give Carroll County a competitive edge in attracting new business.

There aren't many such banks in operation yet, he said, and creating one might lead businesses to view Carroll as progressive and pro-business.

Lloyd Thomas, chairman of the Economic Development Commission, said the role of the commission in the creation of the bank is "not etched in concrete at the moment." He said the commission's role may be that of directing potential borrowers to the bank.

He said local banks could gain from the scheme. "Banks are required by law to spend part of their money helping the community," he said, and the community development bank would be one way for them to do that.

The community development bank would not provide "cheap money" at below-market rates, Mr. Jenne stressed.

He said it was just an opportunity for business people to get financing without having to resort to venture capital lenders.

Mr. Jenne it was possible that the county would provide manpower for administering the project.

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