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Working together, they should pledge to provide maximum support and help to their cash-strapped, but credit worthy customers.
Typically, these are low risk businesses because they are essentially regulated utilities, toll-takers with fee-based, long-term contracts from credit worthy customers.
American Express, which recently became a bank holding company to access U.S. government loans under the Troubled Asset Relief Program, hastened to assure investors of its strong capital position, which has enabled it to keep credit lines open to worthy customers.
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Banks lend when they have strong balance sheets and when credit-worthy customers demand loans.
The Republican says he would convene two meetings, one of accounting professionals to help banks and investors assess the battered values of their mortgages and other assets, and another of top mortgage lenders, to extract their pledges to help credit-worthy customers keep their homes or businesses.
The fight for credit-worthy customers is intense.
The credit card issuer, which specializes in subprime (less credit-worthy) customers, has improved its earnings every quarter sequentially for the past six quarters, and the consensus is it will continue to do so.
For SBA-backed loans, banks are permitted to charge interest rates of up to 2.75% above the prime rate--the rate banks charge their most credit-worthy customers.
As a result, many banks would rather make conventional LOCs to their most credit-worthy customers and take 100percentt of the risk rather than hassle with SBA's requirements to get 75percentt of the loan guaranteed.
If we go down that road, we are likely to ended up with zombie banks whose balance sheets are riddled with near-worthless investments - banks that cannot lend to credit-worthy customers and who cannot trust one another.
According to TeleTech, 67% of customers rarely experience wow-worthy customer experiences.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com