Wednesday, April 25, 2012
Attacking Main Street
I was talking to my banker the other day. He mentioned that I would be required to have my commercial property reappraised in a few years, per the requirements of the Dodd-Frank bill that passed a few years back. A bit if background. I have been paying towards my mortgage for several years now without missing a payment. Also, we borrowed a substantial amount from the bank to build two new apartments above my retail store. Everything is going just fine with respect to us meeting our financial obligations with our building. We are even paying an additional amount every month towards our mortgage. The relationship with our bank is just fine. And yet.... we will soon be forced to pay about $2500 for a reappraisal, unless the DF bill is amended. The reason I assume is that the DF bill apparently seeks to have a more accurate assessment of a banks loan portfolio, presumably to head off excessive risk taking by banks. Fine, I get that but... why not just let stupid banks fail instead? Bank deposits up to a certain point are already insured. A successful bank would come on in and buy up the assets of the failed bank. Perhaps it is not so easy as all that. But there are some that think government regulations are all good with no adverse side effects. Baloney. There is a trade-off always. In this case, property appraisers hit the jack pot while property owners have to pay, essentially, a Dodd-Frank tax of $2,500, for a reappraisal not in my interest or my banks. I suppose there are those that applaud DF as a slap at the big Wall Street power brokers. But the pain will be inflicted on me, a small business owner at 416 Main Street.