Loan crunch now being felt in Washington State

The OlympianOctober 3, 2008 

A stalled national economy and a banking sector gripped by uncertainty has resulted in tighter lending standards for South Sound auto dealerships, home builders and retailers.

Economic volatility the past two weeks, highlighted by steep sell-offs on Wall Street and large bank failures, has created new concerns for the banking industry, Washington Business Bank President and CEO Jon Jones said Thursday.

Banks are either unwilling to lend to each other or to customers because of risk or unable to lend because of a lack of capital, Jones added.

However, bankers are hopeful after the U.S. Senate passed $700 billion in legislation intended to help the economy. The same legislation goes to the U.S. House of Representatives again today after it failed to pass the measure Monday.

"It's a positive move for the country," Venture Bank spokesman Joseph Beaulieu said about the Senate vote. "When you erode consumer confidence it's not good for the economy, but something has to be done to get this economy moving again."

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