Below is a copy of an opinion editorial written by Camden R. Fine, President and CEO of the Independent Community Bankers of America that was published 6 March 2017 in International Banker magazine.
In the United States, there is a broad consensus on the economic benefits of its long tradition of community-based banking. Community banks are highly capitalised, so they are better prepared than their larger competitors for economic crises. And as local institutions, they reinvest in their communities and channel loans to their depositors' neighborhoods—promoting localized growth that radiates out to the broader global economy.
These community banks have been instrumental in helping the nation recover from the financial crisis and economic downturn that continues to hamper the U.S. economy. Unfortunately, one-size-fits-all regulatory policies are hindering community banks from fully serving their local communities and supporting a stronger economic expansion. Freeing Main Street community banks from regulations designed for larger and riskier Wall Street financial firms will produce a positive economic impact while preserving the widespread benefits of local banking over the long-term.
Community banks are on the cutting edge of financial investment within their communities. There are nearly 6,000 US community banks, including commercial banks, thrifts, stocks and mutual savings institutions. Community banks employ 700,000 Americans, hold $4 trillion in assets, $3.2 trillion in deposits and $2.7 trillion in loans to consumers, small businesses and the agricultural industry. As the only physical banking presence in nearly 20 per cent of the 3,000 US counties, community banks are lifelines to many American families with limited financial options.
The community-banking system succeeds because it uses a relationship-based banking model. Community bankers rely on maintaining long-term relationships with the customers and families who live and work in their same communities. As a result, they are held accountable to their customers and have a shared stake in the prosperity of their communities. After all, they can't afford to take advantage of customers who know them and their other customers on a first-name basis.
>> Read more at International Banker