Finance Authorities: Different Opinions Exist on Merits
Wolfe, Lou Anne, THE JOURNAL RECORD
And their powers were designed precisely to give them that ability, counters a well-known state economist.
Asked about the credit judgment of the Oklahoma Industrial Finance Authority and the Oklahoma Development Finance Authority, H.E. (Gene) Rainbolt, chairman of BancFirst in Oklahoma City, said they have the same danger as putting a hydrogen bomb in the hands of a hostile government.
"I have serious reservations that government can do successfully what private enterprise has struggled to do, or perhaps has done unsuccessfully," he said.
But, Neil Dikeman, director of the University of Oklahoma Center for Economic and Management Research, said the finance authorities have a real chance for being of assistance to the economy.
"I'll be frank," he said. I don't think private lenders right now ought to necessarily get too heavily involved in that, because what we need is venture capital in this state, and that means it's relatively a high-risk sort of thing."
Dikeman conceded that he is unsure whether bodies such as the finance authorities, which meet on a regular basis but not daily, confer as often as they should.
"But I think both these authorities are getting some undue criticism because of losses, because that's what they were created for, to take entrepreneurial, high-risk ventures and try to make them work," he said.
Rainbolt said he is concerned that if the authorities are not successful, and their losses are presented to the Legislature to be covered, it will result in a "great diminution of willingness to fund economic development activity.
"What they're doing is making loans, and we've had a lot of bank failures, and those of us who have survived have written off millions of dollars because of failures in our credit-making decisions," said Rainbolt.
"I don't know why government would be able to be more successful than we have."
Dikeman said regulators currently have such tight control over private lenders that venture capital loans are extremely difficult for them to make.
"Without private lending capability to provide venture capital, you've got to have something else, and these two state lending agencies are providing that," he said.
"While it would be nice if they never had a loss, one would suspect that they're not really performing what they were chartered to do, and that is lend in areas where private lenders dare not tread."
Meanwhile, Stan Provus, state bond advisor, said he has encouraged the Oklahoma Development Finance Authority to involve private lenders in future financing packages. …