Fritz Elmendorf Bank Quotations

Small businesses are very important customers for banks today because there are more of them than ever before and each and every bank is fighting to get them.

Small banks come out with an edge on pricing, but what is not measured is the convenience factor.

Any change in rates on home equity lines is directly related to the actions of the Fed. On average, their rates are 1 percent over the prime rate, but some banks even offer home equity lines at the prime. Home equity lines are probably the cheapest way that homeowners can currently borrow money.

The key to attracting small businesses is to give them as many different services as possible. Because today if one bank won't do that, another will.

The larger banks are seeing a lot of market share in this area, but the larger credit unions and the ones being run by ex-bankers are setting up arrangements where a non-member can finance a car right at the dealership just by signing up to be a member.

The broad trend among banks is to service customers almost regardless of their credit standing. They do not want to turn a customer away, particularly if it's a customer with a checking account or another relationship.

Bank loans have pretty attractive interest rates these days. Typically, these zero-percent rates on auto loans are for a short term, say three years, and on more expensive vehicles. People end up buying the car, but use a bank loan to do so. Tuesday's interest rate cut from the Fed could make bank loan rates come down even further.

Banking was never free because consumers were not getting a market rate on their savings and were paying a lot more for loans.

Banks have various sources of earnings. If a bank is large enough to have international operations, it has evolved enough diversification to counteract those losses.