• Trust Department
• Kaw Valley Home Loans
• Financial Tools
• Community Info
• Information Bank
• Consumer Education
• What's New

Information Bank

My father liked to say, "Thrift is a virtue—especially in ancestors!"—perhaps to induce a certain amount of guilt and appreciation in his heirs.  But thrift seems to have lost its luster as a virtue—vaguely associated with being selfish, stingy, uptight, old-fashioned, not with it.

In its place are the virtues of consumerism.  Be a part of the "now" generation, treat yourself to the latest, don't be left behind, don't miss the bargains now available.  The purveyors of goodies have gotten major assistance in their efforts from the government's interest rate policies, credit card companies, and the home mortgage industry.  Keeping interest rates low—an understandable effort to support the economy after 9/11—made credit cheap and buying things on credit easy.  Regulators told banks not to be too strict about making consumer loans.  Mortgage lenders made buying homes easy, even if you could make no down payment and your credit history wasn't the best.  They offered deceptively low variable rates to get you started:  "Take advantage of these rates while they last—now is the time".  Their ads ridiculed stuffy lenders who checked out loans more carefully.  If you couldn't pay your many credit card debts, borrow on your home and have "one easy payment".  Mortgage lenders then sold these loans in batches to large financial institutions and both made huge profits.  They now are sunk in huge multibillion-dollar losses.  Good for them.

But the prize really goes to credit card companies.  They flood our mailboxes with offers of new credit cards that "make it easy for you to transfer your debt to us at a special low introductory rate" (for a few months).  They make a special point of getting credit cards into youthful hands, offering T-shirts, "Karma Points", "ThankYou Points", so that one study shows that 56% of college seniors now carry four or more cards.  The payment system for credit cards is rigged to produce late fees ($17 billion in 2006) and the system encourages getting into unpayable debt at very high interest rates.  Payday lenders also make it easy to get into eternal debt, at huge annual interest rates.

State lotteries also got into the act, actively encouraging their frequently young and lower-income players to "win the big one", bringing in $57 billion in 2006.  State governments have an insatiable desire for money, and when more taxes are resisted, they find ways to sugarcoat the pill and make you think you're getting something for nothing.

Sure, debt is a powerful and constructive part of our economic engine.  And Kaw Valley Bank, like every financial institution, is in the business of making loans.  Credit cards, mortgages, and occasional payday loans when other sources of credit are not available, all provide important conveniences.  But there's a difference between taking a sip and drinking the whole bottle.  And that's where thrift comes in.  When times get tough, interest rates rise, jobs are lost, unexpected expenses and emergencies occur, having little debt and some money in the bank is a lifesaver.  And we all hope to live to a ripe old age—which means that we all need to have been saving when we're young.  We need to dust off and polish up that old virtue thrift.  We promote that at Kaw Valley Bank—after all, our motto is

"STILL OLD-FASHIONED WHERE IT COUNTS!"

(For more about credit abuses see Barbara Defoe Whitehead, A Nation in Debt, in the July-August issue of The American Interest.  The Kansas City Star has also published an op-ed by David Brooks, It's Become Normal to Play the Debt Game, on June 11, and an article on the pros and cons of payday loans, Industry Seeks to Cast Off Perceptions as a Predator, in the June 22 edition.)
Glenn Swogger, Jr., M.D.
Chairman

Contact Us