Oregon Public Broadcasting

Tuesday the Senate banking committee will hear testimony on how the financial crisis is affecting small-town banks and credit unions. April Baer reports on the different ways that rural communities in Oregon have experienced the problem.

Small banks in rural Oregon don't feel the financial meltdown the way the AIGs and Citigroups of the world do.

Even in places like Bend, most locally owned banks weren't carrying the toxic assets that made hash of the real estate market.

And yet, as Bank of Eastern Oregon President Jeff Bailey points out, the banking collapse and subsequent downturn have had major repercussions, as unemployment climbs.

Jeff Bailey: "Everybody's saying the state's at twelve percent. Well, some of our counties are close to twenty percent. That is an underlying concern that I have -- just overall repayment capacity of loans as a whole."

Small town bankers will look to Oregon Senator Jeff Merkley, who's a freshman on the Banking Committee this year. 

They're asking him to advocate for rules tailored around smaller banks that were able to stay solvent.