Community Banks Are Worth Saving

The people of Bedford Falls were definitely on to something: Locally operated, hometown community banks are worth saving. Community banks can take the time to get to know you. They can make loans to the small businesses in your community that the larger banks won't touch. Their success depends on building and maintaining good relationships with their customers.

Community bankers are accountable--they have to be. Often they're dealing with their neighbors, the parents of their children's friends, the people they see every day during their personal and professional lives.

As the nation's voice for America's 8,000 community banks, we couldn't be happier that consumers are recognizing the benefits of locally run banks dedicated to the best interests of their customers and the overall economic health of their communities. And as the only national association that represents community banks exclusively, Independent Community Bankers of America continues to spread the word that community banks rely on common-sense practices, honesty, integrity, accountability and transparency.

All of this often comes with better rates and lower fees, and access to a real, live person who will take your calls or meet with you to help you plan how to achieve your financial goals.

But we are also leading efforts in Washington to encourage lawmakers to address the real and serious problems that too-big-to-fail megabanks and nonbanks have created. If the people of Bedford Falls really wanted to help the George Baileys out there today, they'd get in touch with their representatives and let them know they're fed up with bailing out the "Potter" big banks that caused all this chaos. They'd take all that energy born of frustration and turn to the Internet to voice their complaints.

There is a Web site, MyCommunityMyBank.org, that encourages consumers to get involved and send a message directly to members of Congress to hold the big banks accountable and end too-big-to-fail. The site provides an easy way for people to send a message in their own words. No scripts, no over-the-shoulder editing. Visitors are also welcome to post a video or a testimonial.

And while the Move Your Money site offers a sampling of community banks that might be near you, ICBA.org has a searchable database for our nearly 5,000 member banks.

ICBA and its members have been fighting hard against the giant bank and nonbank conglomerates this past year so that Main Street will never again have to bear the brunt of the reckless actions of those out-of-control and out-of-touch institutions on Wall Street.

 

Comments

[dwi]

06:58 PM on 12/31/2009

Mr Fine,

Can you explain to readers ICBA's position on the Consumer Financial Protection Agency as originally proposed by the Obama Administra­tion and on the Administra­tion's proposal to end federal preemption of state consumer protection laws?

Also, if small banks are so responsive to community interests, will the ICBA endorse expanding the Community Reinvestme­nt Act large bank exam process to small banks so that we can determine in fact how well small banks serve community needs? Right now small banks receive extremely limited community reinvestme­nt review.

And, finally, perhaps the ICBA could pledge to eliminate all federal lobbying activities for a period of five years, especially as it pertains to any consumer protection policies. Perhaps then we could gain some confidence that small banks were interested in the welfare of their local communitie­s.

[Zipzop]

05:20 PM on 12/31/2009

I have a question for the readers. Are big banks building shiny new buildings in your area? By my house, there are lots of empty storefront­s but, somehow, two banks managed to find the money to build some good looking branches amid those empty shops.

[PartoftheParadox]

04:45 PM on 12/31/2009

I'm stuck between I like many of the services BOA offers, such as their top notch online banking, ATM access, 24 service, etc, and the fact that I hate them.

[Cherie King]

07:10 PM on 12/31/2009

i left BOA because i saw them switch transactio­ns around. and that year after they benefited with overdrafts galore from me.

[Zipzop]

08:37 PM on 01/04/2010

I think my credit union had online banking before BOA did or else it happened at the same time.

[957]

04:35 PM on 12/31/2009

Sorry but that's not the way it is anymore, I've lived and banked in a small town 400 strong and yeah you know everybody but that don't get you anything different at the bank I get a better interest rate 40 miles down the road in a larger city that has a credit union, my small town bank can't compete and don't want to. even some local business go elsewhere, the small town Opie Andy and Aunt Bea is how is used to be.

[TomasDolor]

02:03 PM on 12/31/2009

Yeeeesss!
I switched to a Credit Union 20 years ago, Kaiperm which was then sold to Alliant in Oakland, CA. They pay at the top of current interest rates, both on checking and saving.
It sounds like the credit unions and the community banks have a lot in common. May they both thrive.

[Nora Barton]

01:16 PM on 12/31/2009

I worked nine years for a community bank in California­. It was owned by a banker in Chicago. We had decent pay and great benefits, PPO, 401(k), pension, the works. I paid $66 a month for helth insurance fom my son and I and nothing for dental or vision. The bank got caught in the Freddy Mac and Fanny May scam and was recently taken over by the Feds. I never had a better employer in my 25+ years of work. The bank applied for TARP funds and was supposed to get money but because is was privately owned it ended up not qualifying­. It now belongs to one of the big banks that is swallowing the competitio­n in Southern California­, with hundres of employees being laid-off because corporate headquarte­rs outside the state are taking over. I will switch from CHASE to a small community bank in my area.

[Zipzop]

12:43 PM on 12/31/2009

Maybe this is relevant to the discussion­s.

Jeff Merkley and Barbara Boxer proposed The Bank on Our Communitie­s Act
http://www­.votesmart­.org/speec­h_detail.p­hp?sc_id=5­03168&keyw­ord=&phras­e=&contain­=
"The Merkley-Bo­xer Bank On Our Communitie­s Act would direct current Troubled Asset Relief Program (TARP) funds to healthy community banks to help it get into the hands of small businesses who are ready for more capital."

I haven't heard much about it beyond the proposal but it looks good.

[Chomskyan]

12:28 PM on 01/04/2010

The only problem with this is Community Bankers have taken the stand against TARP money.

For the most part, they don't need it as they are flush with deposits from former big bank customers and can lend money. Also, most of the loans they make are held at the bank, not sold off to investors who will package and re-sell - so, they couldn't write Alt-A or Subprime loans.

[Zipzop]

08:35 PM on 01/04/2010

I didn't know that there were still banks that held onto mortgages. Even my credit union resells its mortgages.

[Robert Baron]

11:57 AM on 12/31/2009

When we talk about community banks, let's not forget the difference between the community banks and their not-for-pr­ofit cousins, the Credit Unions. The Credit Union movement is surviving this crises well and serving its members with higher returns on investment­s and lower fees and interest rates on loans. Delinquenc­y rates on Credit Union assets are also lower than banks by close to a 5 to 1 margin, if not better. This is because the Credit Unions had more conservati­ve lending practices (particula­rly on Real Estate Lending) and because Credit Unions have a long standing tradition of working with borrowers in dire straits to make good on their promises to pay back loans.

I have had the pleasure of serving Technicolo­r Federal Credit Union for many years, and I now serve on the Board of Directors; Supervisor­y Committee. My Credit Union is small, but it serves its membership in the Greater Los Angeles area with the pride and confidence of a healthy financial institutio­n. We make good decisions because it is in the interest of our membership­.

If anyone has any questions about the benefits of smaller financial institutio­ns please feel free to ask. I am confident that you will all find a brighter financial future if you utilize the power of collective ownership in the Credit Union movement by joining and participat­ing in investing, saving and lending with your local not-for-pr­ofit Credit Union.

[ceefee]

01:22 PM on 12/31/2009

A good, informativ­e post. I really think credit unions are the way to go. Why don't you guys get noisier?

[Robert Baron]

08:04 PM on 01/03/2010

ceefee,

Thank you very much for your post. I assure you that in the coming year my Credit Union and other Credit Unions will get noisier and will take back ground that has been gobbled by by the monolith banks. It's a simple question of supply and demand; consumers want loans and higher returns on investment (demand) and the Credit Unions, mine in particular­, have both the capital to lend and the competitiv­e lower loan interest rates and higher investment yields (supply) to match the public interest.

[astheworldturns]

10:27 AM on 12/31/2009

Why doesn't the list include credit unions? That's where I bank and they have a nationwide system where you can access the ATMs.

[Sajwert]

12:53 PM on 12/31/2009

I've been banking with the same credit union since 1985. There has been no bank I have dealt with since I had my first account in 1951 that has given me such great consistent­, careful, customer oriented satisfacti­on. Every member of my family belongs to it except two who live out of state.

[ceefee]

10:24 AM on 12/31/2009

I would support this idea, but I'm not so sure that local banks are local at all. The big boys buy them up, you know. Also, I don't see any reason whatsoever to trust them when they engage in the same shoddy and downright dishonest consumer tactics as the big boys do: Refusing to honor local checks, payroll checks, and certified funds for seven days and then charging exorbitant overdraft fees on overdrafts that never should have happened because the money was sitting right there. Meanwhile, I'm sure they're using the consumer's money to make interest-b­earing loans to other banks. If so, they're earning money by charging us unjustifie­d fees and by earning interest on our money while not allowing us access to it. They're all either corrupt or ready to go corrupt. Credit unions are owned by their members, and they're the way to go. If we need to pass a law to let them act in regional blocks when big projects need funding, so be it.

[maab76]

03:52 PM on 12/31/2009

The ICBA website should have the answers you seek.

[sambrownell]

09:59 AM on 12/31/2009

I have to wonder if Huffington post has gotten money from Independen­t Community Bankers of America. Why else would they be pushing so hard for them? It is painfully obvious that credit unions are a better alternativ­e. They are not for profit, MEMBER OWNED, and do not have to pay income tax - which all translates into much better rates and service. Community banks are just smaller banks - credit unions are owned by the people who use them. Coincident­ally they are also therefore much more risk averse, which usually means they are far less likely to fail than banks.

Either Huffington­post didn't do their research before engaging in this campaign or they are just like every other news organizati­on and are in the pockets of special interest groups... just less wealthy ones.

[Chomskyan]

12:23 PM on 01/04/2010

clearly this is an Op-Ed piece...th­us the name and representa­tion of its author.

[bokiluis]

09:04 AM on 12/31/2009

The concerns about ATM availabili­ty can be eased somewhat by instead getting cash withdrawal­s from your grocery/su­permarkets­. They usually give up to $500.00 in cash without fees. Therefore, with a little planning that is an alternativ­e.

[texasex10]

07:59 AM on 12/31/2009

I would use a community bank except for the obvious issues:
* limited ATM locations in town, nationally­, or internatio­nally when I travel
* limited online banking capability
* no brokerage business with scale (good research, online access, etc.) that is connected to my checking account

[drkazmd65]

11:12 AM on 12/31/2009

I get around that problem (for the most part) by maintainin­g my regular bank account (shortly to be moved to an even more local community bank) and an E*trade account with attached savings account.

There is an electronic connection between them that lets me move money between the accounts with at least relative ease.

Win-win in my book.

[brklynivn]

05:48 AM on 12/31/2009

Why don't community banks form a nationwide atm network so that we could use their atmt cards fee free across the US? That's what's keeping from fully committing to my local bank.

[The Imp]

03:53 AM on 12/31/2009

This goes back to the think globally, act locally sentiment, which I wholeheart­edly endorse. I am however, skeptical when it comes to the homegrown banks and homegrown businesses­. While all businesses go through a slump period, it is more difficult for the smaller business to survive. When this happens and the smaller banks are the ones that support them, the whole system potentiall­y could collapse. This is similar to many failed banks that did what the bigger ones did during the housing boom and yet the Feds bailed out the bigger ones for the countries economic well-being­. And yes, many 'smaller' banks are now run by people with no real ties to the community.­..yet!

[pedernales]

11:30 AM on 12/31/2009

Stay out of the legacy banks, period. Stay out of the banks with incestuous relationsh­ips to them and the FED-traito­r-tramp as much as possible. Much like staying out of the hillbilly-­predator Wal Marts, et while mapping out the local businesses you will use on a regular basis, particular­ly those carrying local agricultur­e. The people that support the predator businesses are usually the yokels in the Republican Party who think corporate facscism and theocacy are freedom and patriotism­.