Banking Locally Keeps Money In Your Community

It has become a common scene across America. The bank on the corner has another new sign. When I graduated from high school, I landed my first summer job working as a bank teller for a local savings and loan in suburban Detroit known as Standard Federal Savings. Since that time, the sign in front of a branch by my Mom and Dad's home has changed numerous times as Standard Federal merged with Michigan National Bank, which was later sold to Netherlands-based ABN-AMRO, which then merged it into its existing North American operation under the LaSalle bank name, and most recently, sold to Bank of America. This is a scenario that has played out time and time again as industry consolidation, and investment in the American banking industry by foreign multi-nationals has created a handful of very large banks, where centralized operations have greatly stripped away the notion of community banking. The good news is that consumers still have a choice to bank locally, keeping their money and lending decisions in their own back yards. According to the Independent Community Bankers of America, there are still nearly 8,000 community banks, including commercial banks, thrifts, stock and mutual savings institutions, with over 50,000 locations throughout the United States. Community banks are a critical source of lending for farms and small businesses. According to the SBA Office of Advocacy, community banks provide 35% of the total dollar amount of loans to small businesses under $1 million dollars. Moreover, community banks' boards of directors are made up of local citizens who want to advance the interests of the towns and cities where they live and where the bank does business. Most community bank loans benefit the neighborhoods where depositors live and work and independent research has shown average fees for checking accounts and other depository services are lower at small banks than at large, multi-state institutions. The ICBA website features a handy online tool to help consumers locate nearby local independent banks [CLICK HERE]. Another equally good alternative is to locate and join a local area credit union. Unlike banks, credit unions are member-owned, not-for-profit, cooperative financial institutions. Credit unions operate under a unique philosophy of “people helping people,” allowing their members to pool their savings, lend to one another, and own the organization where they can obtain financial services. This does not mean that all credit unions are "small potatoes" in either the number of members or amount of assets. In fact, some of our nation's largest credit unions have as much capital as medium-sized commercial banks. Historically, credit union membership eligibility was based on a common bond between members such as employees of a particular company, members of a church parish or the like. Today, many credit unions hold a community charter, allowing them to offer membership to anyone who lives, works or worships within the given geographic area. Savings are generally insured by the NCUA, an independent federal agency that oversees and charters federal credit unions in the same manner that the FDIC insures deposits in commercial banks(make sure that your credit union is NCUA insured). The National Credit Union League offers a website located at http://www.findacreditunion.com to help consumers find local credit unions where they may be eligible for membership. The choice is ours, place our money in large banks that have no vested interest in our families and business other than charging ridiculous fees, or bank locally and keep investing in our own communities.