Now this is how you run a solid, old fashioned type of bank. CNBC interviewed a small, community bank CEO (Frank Sorrentino) from North Jersey Community Bank today, and if I was ever fortunate enough to run a bank, this is how I would hope to get it done.
The old school banking model:
Hopefully, I can be as diligent and as patient in my Lending Club peer-to-peer lending experiment by picking high quality loans from borrowers with good credit, a high probability of repaying the loan, and simply watch the compound interest grow.
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Personally, I find it somewhat refreshing to find a banker who knows how to manage his money, doesn’t need tax dollars to survive, and has still managed to grow his business under these tough economic conditions. The same can be said of ING Direct’s CEO (Arkadi Kuhlmann), who stated that one of the reasons that ING Direct has so few mortgage defaults was that he only sold mortgages that he intended to keep — not sell.
It may seem old fashioned, but some things never go out of style.