Congressman Andy Harris (R MD-1) told Herb and Christine Will at a “Town Hall” meeting Tuesday that it may be too late for the couple to save their sandwich shop and home from being liquidated by PNC Bank, even though the couple has a flawless credit history with the lender.
In the 10 minute exchange with Harris, the Wills wanted to know how a national bank can get a bailout from the government, and at the same time, call a good-performing loan.
“Our home has lost value and our lender decided they would call the loan on our home,” Mr. Will told Harris. “They cross-defaulted everything, so now they’ve called our business loans and our construction loans, we invested heavily in Chestertown, and we built a new building here.”
“They’ve called it all,” Will said. “And it wasn’t that long ago when [the big banks] were in DC with their hats in their hands asking for money themselves… To my family, I’m too big to fail, to my employees, I’m too big to fail, and we’ve never been delinquent, and we’ve never missed a payment.”
Harris pointed to regulators tying the hands of banks.
“Banks are in the business of lending money, they really do want to lend you the money,” Harris said. “Their fear is that a federal regulator looking over their shoulder says, ‘on paper you’re not a good risk’… the problem is regulators have a one-size-fits-none approach to the regulation.”
Harris discussed the ordeal with First Mariner Bank and spoke in terms of community banks not having enough cash reserves to satisfy regulators, leaving community banks at risk of being bought out by larger banks.
Mr. Will explained to Harris that their original loan was with Mercantile before the local bank was bought by PNC.
“Are you telling me that a federal regulator said to [PNC] to pull the trigger on us.” Will asked.
“Somewhere, someone in that bank is worried about what your loan looks like on paper,” Harris replied. “I’ve talked to bankers about this and they say this is what they have to do… because the federal regulator coming in will say your loans aren’t good [and the bank] has to increase their reserves. That’s what all the banks are worried about now, and it’s because of what I view as misguided regulation. It is the approach that government somehow knows better than the local banker… literally, some bureaucrat in Washington knows better than your local banker — what loan to make and what loan not to make…”
Harris said the Financial Reform Bill needed to be changed, but it may already be too late to help the Wills.
“For you it may be too late – to be honest with you,” Harris said. “Hang in there.”
Will responded that they were indeed staying in the fight to save their home and business, but he also wondered if the banks would suffer any consequences.
“I just don’t think that justice is served when you’ve spent six years of hard labor producing something, investing heavily in the town, trying to beautify your neighborhood, and then your bank is purchased by a national bank, which in turn goes and gets money from Washington because THEY don’t look good on paper, and then they call your notes,” Will said.
“Sir, I couldn’t agree with you more,” Harris said. “And we’re paying attention to it, and I hope in time to do something for you.”
After the meeting, the Wills spoke privately with Harris’s aides. Mr. Will was told that Harris’s staff would look into the matter.
“I introduced myself and told Mr. Harris the nature of our business, and give him my business card,” Will said. “And they said they would look into it.”
Also at the meeting was Former Maryland State Delegate Richard A. Sossi (R-36) who has also offered to help.
“We’re looking into this,” Sossi said. “Hopefully we can do something sooner, rather than later.”
Edward E. Maxcy says
They had better do more than “look into it”; they has best make it right. That is why they were elected, some say: to help the average citizen not just the “significant” donor!
Lainey says
Hello Mr. Harris,
You, dear sir, are the regulator.
Thank you for your attention,
The Little Guy
StellaL says
How I miss Wayne and everything he stands for .
JIM says
“Hang in there” ????
Andy Harris: Still embarrassing us.
BTW, why won’t another local bank pick up this loan?
Gren Whitman says
When Rep. Harris said, “hang in there,” what he forgot to add was, “until I’m replaced by someone who cares.”
Robin Wood Kurowski says
I am a half full kind of person, business owner, former Chestertown Bank/Mercantile employee, and our companies are and have been a Chestertown Bank/Mercantile/PNC customer.
So, I focused more on this on this:
“Sir, I couldn’t agree with you more,” Harris said. “And we’re paying attention to it, and I hope in time to do something for you.”
After the meeting, the Wills spoke privately with Harris’s aides. Mr. Will was told that Harris’s staff would look into the matter.
“I introduced myself and told Mr. Harris the nature of our business, and give him my business card,” Will said. “And they said they would look into it.”
Also at the meeting was Former Maryland State Delegate Richard A. Sossi (R-36) who has also offered to help.
“We’re looking into this,” Sossi said. “Hopefully we can do something sooner, rather than later.”
Many of us in the Rock Hall community have had many concerns about/with PNC including the fact that the building is now empty and employees had been retired and relieved over the past few years and the current employees had to find new jobs or be relocated.
PNC has a business plan and model and obviously knew what their plan was when they purchased the operations and locations on the Eastern Shore and Baltimore-Washington-Annapolis corridor. Herb, Kristine and many others in the county and on the shore, including PNC’s own employees, have been impacted by this acquisition.
Thanks Chestertown Spy and Melissa for first bringing the Herb and Christine story first to light. There are many arms and legs to this. I am hopeful for them and with the help as indicated above.
Keith Thompson says
There are two things at work here…folks are calling for Congressman Harris to take action to help a constituent which I infer as forcing PNC to take action, but as a lone member of the House Of Representatives he doesn’t and shouldn’t have the power to tell a bank how to conduct their business if they’re not breaking any laws. If Congressman Harris personally encourages, nags, conjoles, harrasses, etc. PNC to take care of the Wills and PNC doesn’t cave, has Andy Harris failed the Wills or has neglected his constitent service? As much as I think PNC is in the wrong here and believe that Congressman Harris should help, I’d feel more uncomfortable if a single member of the House Of Representatives had the power to tell PNC how to conduct their business.
JIM asks the most pertinant question here, why won’t another local bank pick up the loan?
Robin Wood Kurowski says
“JIM asks the most pertinant question here, why won’t another local bank pick up the loan?”
@ KDog:
Many consumers, loan customers, businesses, investors and employees already have. I have noticed that Peoples Bank has been at the ready and you will find your some of your old PNC reps in many Peoples locations.
But the fact is that you still have to run thru the assets to liabillities, credit check, cash flow, reserves, etc stuff. Some pass with flying colors, some do not. This has nothing to do with the type of people or business owners you/they, it’s that little program that you get run through and what it indicates…….and what you have pledged for your initial lines of credit, notes and mortgages. Also…there are new caps and regulations.
I think we all know times have really, really changed.
I just could not believe it when we were told us we could not wire over hundreds of thousands of dollars to get boats built in England, Spain, France and Finland over a 6 to 1 year period without an actual customer, set of ships papers or security other than guarantees and an insurance policy…and not even seeing the boat until it crossed the Altantic, was off loaded in Baltimore and cruised across to Rock Hall. (Just kiddin’, of course…..those were the good old days in the boat business before 9:11)
I hope Herb and Christine are working on other sources. That seems to be a good plan of action from our end of the county, unless you are doing well with PNC and I know some that are.
jenifer says
It’s all so daunting. I am so proud of Herb and Christine for fighting so hard. “Hang in there” is not an acceptable remark from Rep. Harris. It’s glib and it not helpful.
Maybe we need to get Mikulski or Cardin on it.
Herb and Christine, I love you! (Not that helpful either, I must admit, but from my heart). I wish I had the money to fix this.
Robin Wood Kurowski says
We should also ask for help to take a look at the costs to employ, operate and inventory in Maryland. I am sure this impacted Herb and Christine, too.
Keith Thompson says
Exactly how in the context of closing a ten minute exchange with the Wills by saying “hang in there” glib and not helpful? If the entire exchange was “I’ll look into this and hang in there” and he moves on to the next question, then that would be glib and not helpful. I’m not sure I buy his explanation to the Wills, but its apparent from the dialogue that he didn’t blow them off. As I mentioned, there’s a fine line between helping a constituent and overstepping one’s authority. He can certainly put pressure on PNC to give the Wills a break and it would be appropriate constituent service for him to do so, but as a lone Congressman he doesn’t have the authority to dictate bank policy.
Robin Wood Kurowski says
@ Middle Class…..Herb & Christine are not alone. And we have all had to adjust our sails/sales and way of doing business.
Also, it is my opinion that Kent County has been a very business friendly environment and many of us had lines at both CBM/Merc/PNC and Peoples. Heck, we even had another one at Southside Bank in Deltaville, VA for our southern bay office. So just to think that you have done so much business for so long and it no longer matters is quite something to get over and adjust to. I am grateful, though, for what we do have now and I know what we must do.
A factor for us has been…..order book and solid projections.
That is something I find hard to do and I know my business associates in Rock Hall may feel this way, too.
Back in the day, we had a 2 – 3 year order book backed up by contracts, deposits and for new boats at a shipyard or factory contract on a build order.
I totally understand where Herb & Christine are….and if I could wave a wand for everyone in Kent County we would reset back to early days………of course that would put Herb & Christine back at Osprey in Rock Hall!
My mom is in Real Estate and she often reminds me….”It’s pretty thin air up there” and my husband tells me “If it were easy everyone would be doing it.”
I guess I am getting off track…….but I TOTALLY feel Herb & Christine’s pain and so do many others. Perhaps you would like to visit me sometime and I will show you our history and how many boats we floor planned and paid interest on and our track record………
Middle Class says
@Robin
I ask again:
Do you disagree with Mr. Harris, who agreed with the Wills, or are you on the side of regulators?….
@Keith,
Andy Harris can introduce a law tomorrow that would end calling loans on any one who has made payments on time in the last 12 months and bring it to a floor vote. He complains about regulators like everyone else…We don’t elect people to complain like everyone else, we elect them to do something.
Steve Payne says
Middle Class tells the story correctly about federal bank capital requirements . Capital requirements have been around sine the 80s but were relaxed until the crisis. Mr Harris statement is true that bank regulators rate loans now. What he does’t say is that the renewed capital requirements can be satisfied by banks selling stock or some other means of capital investment into the company. This is what the Treasury and Fed were trying to get them to do. Lower the leverage. The banks don’t want to do this because it dilutes the equity in the company which will cause stock prices to decline. So the implication that the government regulators are making the banks call in loans is not the whole truth. Even foreclosing on the loan asset doesn’t cure their problem however because then they own the upside down property rather than the loan. This would not help their capital situation either. So I think they simply want to get out fast rather than give people a chance to work out a bad situationby by holding the loan longer or selling stock.
@ jenifer. Herb told me they have talked with Sen. Mikulski about this and she is trying to help too. I think they should talk to the Gov too.
@Robin. Is Honey Wood your mom?
Robin Wood Kurowski says
@Middle Class – Oh, sorry..I did not answer your question, did I? Or at least in a recognizable way….
Here is what I think….I agree that it is good that Mr. Harris and anyone else (…like animals, minerals, Dems, Reps or Miss Mazie’s Sewing Circle) has/will come to the aid of Herb, Christine and others like them. Do I think that anyone can help and impact what has been decided by PNC…….ummmmm….probably and realistically…..no……..
So, I do agree with Mr. Harris on the point that it may be too late. And it was probably too late when the PNC acquisition was made. Again, I think that they had/have a game plan and a formula. Some of us squares did not fit into the round holes.
So, it has nothing to do with the type of customer Herb & Christine have been and it has everything to do with the type of customer Herb & Christine are.
It’s very similar to what we do for a living and the type of financing we need (both for inventory and for buyers)……no one has a great taste for financing for new and trade sale and power boat. And I understand why.
No matter how much we love Herb & Christine’s food and their business(and them as people)…..it is a hard one to get financed. Just like ours….
Am I on Team Herb & Christine?….oh hell yes! Do I appreciate the honest answer Mr. Harris gave and also at the end he said he would look into it! oh hell yes!
I would recommend that Herb & Christine try other things, if they have not already, that would provide SBA loan guarantees and funding for females and start ups.
I mean, many of us are basically starting over and changing our business plans and models…are we not?
Am I not aware of regulation and how it has impacted us trying to obtain financing for ourselves and those we sell to? Oh hell yes and it makes life and business a struggle everyday (and night while we lay awake). And I guess that is where I may have been confusing……I guess I over explained what I think the situation is.
Do I think that some regulation is/was necessary…..oh hell yes……is it favorable to “us”…..oh hell no!
Ok….I have been up since 3AM (it’s that old Hubbard’s Pier thing I can’t shake) so I hope I am making myself a little clearer. 🙂 Have a great weekend.
BILL PARKS says
As our nation struggles with growing debt, we see that we have work to do, people to do the work, the schools to do research and train our work force, and the natural resources to make whatever we need. We are, however, deficient in small pieces of green paper with the pictures of dead white men on them. In other words, our problem is a chronic shortage of currency.
According to the Constitution, and the Supreme Court, issuing, or coining, money is an enumerated power of the congress. Understanding that the United States is a sovereign nation, the Supreme Court ruled that it has the inherent authority to issue all the money it needs or wants, their ruling in the last law suit dealing with ‘Legal tender’ was decided in 1884.
Because Congressman Harris is our duly elected representative, the authority to issue our nation’s money is vested in him. Following the example set by Abraham Lincoln, he has the power to issue all the money our nation needs.
Without giving the American people an explanation, Congress continues to delegate our nation’s sovereign authority to a cartel of privately owned banking corporations that create money using bank credit issued to themselves, the banking system lending our currency into existence as the principal of loans.
With the exception of government issued coins, our nation’s money supply, $55.7 trillion according to the internet debt clock, is borrowed from the banking system. The annual interest payment on this debt is $3,65 trillion, meaning, in fewer than 16 years the entire $55.7 trillion will have been paid to the banking system, causing a chronic money shortage in the economy.
Cynthia McGinnes says
The regulations on financial reform were written and are controlled by the Senate. Any floor vote in the House on this issue would be ignored by the Senate. IMO, the only person who could help the Wills on a federal level is Senator Ben Cardin. If you say we elect people to do something, then surely a long term Democratic Senator could be expected to accomplish more than a freshman Republican congressman. I would respectfully suggest that all of the registered Democrats who have dissed Dr. Harris here please contact Sen. Cardin..he should listen to Democratic voters, and he could write a bill calling for an end to calling loans on people who have made payments, and it would pass a Democratic Senate. I guarantee that if it passed the Senate that it would pass the Republican House.
It makes me sad to see everyone castigate Dr. Harris, when his reply to the Wills was everything that it could be. Also, why don’t people refer to him correctly as Dr. Harris,..is this meant to be an insult? Dr.Harris has spent his medical career as an anesthesiologist for high risk pregnancies and deliveries..he is a caring man who dealt with life and death every day. I just wish you all would give him a chance. You might not agree with his conservative political philosophy, but he is a good and caring and intelligent person…he deserves a lot better than he gets here on the Spy commentary blog.
Robin Wood Kurowski says
@ Steve Payne…… yes Honey Wood is my mom. Thank you for asking! rwk
Robin Wood Kurowski says
@ Cynthia
“Also, why don’t people refer to him correctly as Dr. Harris,..is this meant to be an insult?”
Oh, yes….you are right..I should have referred to him as Dr. Harris….but no insult was meant by me……..have to plead my Rock Hall upbringing and the use of Mr. and Miss……I almost wrote Mr. Andy…..:-)
Enjoy this beautiful weekend…….I know you will…..especially if you come to Rock Hall………… 🙂
StellaL says
“A caring person” who ran an absolutely nasty campaign against Wayne Gilchrest and who fights
against a woman’s reproductive rights. No thanks.
Robin Wood Kurowski says
@Middle Class…
Same thing happened to me/us………..
Tell me your real name, come visit me in Rock Hall….
Face to face not only will I explain, I’ll show you
Steve Payne says
I was impressed by Rep Harris at the meeting. He was very nice, articulate, and pleasent. No flame throwing or badmouthing at all. He complemented or agreed with the current administration on certain things several times. I even complimented him in the parking lot.
Keith Thompson says
Middle Class wrote…”Andy Harris can introduce a law tomorrow that would end calling loans on any one who has made payments on time in the last 12 months and bring it to a floor vote. He complains about regulators like everyone else…We don’t elect people to complain like everyone else, we elect them to do something”.
Yes he can and perhaps he will (but probably won’t) but that’s not really my point. My point is that he apparently gave an honest answer to contituents having problems without brushing them off, but some people have such a negative opinion of the congressman that anything short of taking care of the Wills’ loan out of his own pocket will be seen as failing in his job. I’m not a fan of many of Congressman Harris’s positions, but I have found him to be very accessible and willing to answer questions and it appears his appearance in Chestertown echoes my dealings with him. Also, the fact that he’s willing to show up in Chestertown which is not a town politically friendly toward him, shows that he’s not ducking anybody.
The Will’s problem does get back to JIM’s original question…why haven’t any other local banks stepped in to help, and as you so rightfully pointed out, they see the same risks that PNC sees. I think the problem the Wills are having sets off a different set of alarm bells with me in that I wonder if it means that the business and economic climate in Chestertown is seen as too big a risk to invest in whether its from a banking perspective or a business one.
Robin Wood Kurowski says
@ KDawg:
“I wonder if it means that the business and economic climate in Chestertown is seen as too big a risk to invest in whether its from a banking perspective or a business one.”
PNC no longer has a branch in Rock Hall even though we pride ourselves on our town, our community associations, churches, causes, resources and businesses. There are several that are celebrating from 25 to 65 plus years in business. Business, civic duties, celebrations of faith and family life go hand in hand.
Family, marine, hospitality, agricultural and competitive sales based businesses are not attractive to most lenders. Further to complicate this is that getting dollars and credit lines to your buyers has never been tougher.
Again, PNC had/has a plan when they decided and went through with this acquisition.
Finally, we have several business associates in the marine or marine finance business on the Western Shore in areas considered by some to be the yachting mecca of the world. They have the same tail to tell that “we” do.
Footnote: I consider Rock Hall to be the yachting and boating mecca of the world.
Keith Thompson says
@Middle Class
I’ve certainly talked about the plight of the Wills on the air several times and we’d be interested in having them come on the air to talk about their situation. I generally don’t book the guests, but we may already have extended the invitation and haven’t worked out the schedule yet. Anyway, we’ve had Herb’s Soup & Such on the air as an advertiser in the past and Herb was a regular listener when we still had the oldies format, so we have had some regular contact with them in the past. We also have a couple of local banks on the air as advertisers, but not PNC .
Your suggestion of having the Wills and one of the area banks on the air is a great idea but the problem we often run into is that a lot of people in the community are reluctant to come on the air, even if it just to present their side of the story. Keep in mind when you hear someone on the air here, it’s because they’ve accepted an invitation from us. If we don’t have someone on the air it may not mean that we haven’t asked. We certainly can’t force people to come on the air and I’m not interested in doing the “60 Minutes” thing and ambushing people with a microphone (besides that makes for good television but not necessarliy good radio.)
As for Andy Harris, my defense of him isn’t because I’m a fan of his policies (because I’m generally not) but it’s because he’s making himself accessible to us and to his consituents. I think the criticisms levelled at him at the Town Hall meeting are based on the political opposition to him rather than by his presentation, I don’t really know Rep. Harris that well, (nowhere near as well as I know Frank Kratovil) but he’s been far more accessible than Kratovil was when Kratovil was in office. Oddly enough that was the exact opposite when he was running because Harris was harder to get on the air when he was a candidate. Anyway. polically I’m a huge fan of former Congressman Gilchrest who has also been very accessible to us, even after leaving office.
MD Eastern Shore says
@Gren: Oh yea, like Frank Kratovil would care. Talk about a waste of space. In general, the 1st district is a gerrymandered mess designed by the MD Democrat party to create safe Democrat seats on the western shore. We both know that Baltimore County and the Eastern Shore have absolutely nothing in common except for a Congressman spread so thin he can’t possibly be effective.
Re: the Herb situation: as I’ve said before, I’m sympathetic, but come on people, the government is here to help. It’s what they do. This is just broken eggs, the omelet will be yummy, won’t it? Remember this the next time you insist that the government “do something”.