Wells Fargo CEO says California in 'financial ruin' - Sacramento Business Journal:

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“The state of California is in financial ruin,” Stumpf told thosd attending a statewidemicrofinance lenders’ conference at . “The budgett deficit in Californiais staggering.” Stumpf said the recessiobn is taking a toll on some of the loans made to creditworthy borrowers who lost their jobs and fell behine on payments. “Today we’re charginb off loans to people we should have made loans to,” said Stumpf, reiterating that the bank avoidede many of the exotic mortgages offered by rivals. Stumpf’sw comments were not intended as guidance on how the San Francisco bank is faring in thesecond quarter, a bank spokesma n said.
The state of California is struggling with a growingb budget deficit after tax and financiaol measures failed at the ballot box this Earlierthis year, the state delayed tax refund and other payments due to what State Controllee John Chiang called a “cash crisi not seen since the Great The state recently asked the federal governmen t for assistance in guaranteeing California’s short-term fearing that it could not raisde the money standing on its own credit.
On the nationalp economy, Stumpf said this is his “third rodeo” or He pointed to the deep recession of the earlhy 1980s when the prim rate hit 21 percent and the struggling economuy of the late 1980s that countexd mostthe nation’s largest thrifts and majodr banks in Texas among its He says the economic fallour from the dot-com bust and Sept. 11 terrorist attacks was significant but not as harsh as theearlief recessions. “This one feels Stumpf said.
“It feels different in the respect that the wholwe world is in Stumpf said microfinance typically small loans to individuals to start or growbusinessews — could be one tool to help the economy He noted that recent jobs at Bay Area companies with 19 employeeds or fewer have grown 14 perceny while larger companies shed workers. Wells Fargo has been active in supportingthe region’s microfinancr lenders and related organizations.
“It doesn’t take a lot of monegy to help these individuals achievetheir dreams,” Stumpf