Community Banking is consumer protection
The Fed reports that the economy is gradually recovering from the harsh fallout of the Wall Street financial crisis, and attention is turning toward consumer protection. Policymakers have established the Consumer Financial Protection Bureau and enacted a plethora of new financial regulations. The hope is that the additional oversight and regulation will address concerns about the questionable financial practices of the largest banks and non-bank financial institutions. However, upon reviewing recent financial statements for the largest banks, I’d say not much has changed.
I’m not exactly sure what the largest banks in the country are doing, even after reading through their discussion and analysis. One bank’s report is over 190 pages! My favorite heading is “Financial Instruments Sold, But Not Yet Purchased, At Fair Value.” Honestly? The good news is, for consumers looking for a safe, secure and accountable source of financial services, the answer is right here in Seneca Falls. Community banks — the hometown financial institutions that have been serving America’s communities since our nation’s founding — operate a business model that is inherently supportive of consumers and local economies. Generations Bank is a proud champion of this model.
Granted, due to the various regulations and accounting disclosure rules, even our audited statements include some difficult verbiage; however, our business is primarily limited to investing local deposits in the local economy. Our statement headings are straight-forward — for example, “Loans Receivable” and “Deposits.” No swaptions , currency trading hedges and the like.
Local, community banking — the kind we provide at Generations Bank — is built upon one-on-one relationships between community bankers and their customers. By banking with a community bank, there’s a level of consumer protection in that we know our customers firsthand and are personally accountable to them.
The community banking industry recognizes April as ICBA Community Banking Month, I encourage consumers to consider the benefits of banking locally. Community banks maintain a symbiotic and mutually beneficial relationship with our customers. We take in local deposits and put them to productive use by lending that money back into the local economic ecosystem—to local small businesses, entrepreneurs, farmers and home buyers. That’s why community banks are so important to our communities. And it’s why community banks continue to advocate policies that distinguish these local institutions from the large and complex financial firms that have demonstrated significant risky practices to consumers.
With more than 6,000 community banks operating 52,000 locations in local communities throughout the United States, there is ample opportunity to explore the benefits of local banking.
Hometown community banking has helped build this country and its many, diverse communities. Remember, community banks are only successful if their customers and communities are too. With a direct incentive to do right by their customers, community banks are a critical source of financial stability for individual consumers, local businesses and the economy as a whole. To take advantage of this safe, secure and stable source of financial services — and to contribute to a more vibrant and sustainable economy in your community — I encourage consumers in our hometowns to see for themselves the benefits of community banks, the original consumer protectors.