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Lynn Paulson
Chief Executive Officer

Traditional banking as we know it continues to change and evolve.  Never before has there been such a consumer demand for a wide spectrum of product delivery channels and methods than today’s society necessitates.  The expectations from our customers range from the technical savvy Gen X and Y generations to the more traditional senior citizen expectations (but also understanding that some of our seniors are extremely technically savvy as well).  At Choice Financial, we try to find the right balance between high tech and high touch in delivering our financial products. 

These demographic changes and generational evolutions are also, in part, impacting the number of branch banks in the U.S.  The number of retail branches in the U.S. is on pace to decline this year for the first time since 2002. 

In addition to changing customer expectations with respect to real-time account access with advancing technology such as mobile banking and others, larger banks are taking a hard look at individual branch profitability.  For many larger banks, branches that do not meet certain profitability criteria are being sold or closed.

Many banks have reduced their lending and levels of borrowing.  Much of this reduction has been driven primarily by the lack of quality loans.  Many of the traditional and successful businesses have simply hunkered down and taken a conservative approach in their current business models by conserving cash and reducing borrowings.  Many banks are getting criticized for not making more loans, but at the same time are being criticized if they make higher than average risk loans to marginal borrowers and businesses.

There seems to be about four major thrusts in Congress these days – health care reform; deficit spending; the tidal wave of entitlement spending obligations on the horizon for Social Security; Medicare and Medicaid; and financial services reform. While they are all somewhat separate initiatives, they’re also very much intertwined and will have a dramatic impact on our economic future for us, our children and our grandchildren.

We’re very much at a crossroad with respect to finding solutions to these critically important issues.  Partisan gridlock in Washington these days seems to be in vogue.

In some respects, choosing to do nothing may be as problematic as making a tentative choice.  The longer we wait to address these issues with meaningful solutions and the needed sacrifice, the harder and more difficult they are getting to solve.  There is no quick and easy fix to this dilemma.  It took us years to get into this situation and it will take years to get out.  But we need to start crawling out of this hole now. 

Solutions will not come without sacrifice.  We need to understand that in large part our prosperity of the past decade was financed with public and private debt.  The party is over and now it’s time to pay up.  You can’t spend your way into prosperity and you can’t borrow your way out of debt.

Americans need to take these issues to heart and reduce them to a point where they see what it means to them personally – and more importantly to their children and their grandchildren.  For most, when you put it in this micro-economic context, it means more than taking a look at it from a macro level.

There is a huge debate on what the appropriate level of government involvement is needed to fix these issues.  There are those who believe big and expanding government is the cause of the problem – others believe it’s the solution.

You decide.  But be informed and understand the dire situation we’re getting into.  There’s no need to waste a good crisis.

Lastly, to believe that everything will return to ‘normal’ may be wishful thinking.  Whatever happens, be assured, there will be a new normal on the other side of these fiscal problems.  That said, there’s a chance that the new normal may be better than the old.

Be informed, get involved.  Be part of the solution and not part of the problem.  Be a change agent, not a change victim.  It’s your problem – it’s your future – and the future of your children and grandchildren.  Collectively we can fix this problem. 

--Lynn