Local businesses are at the core of our communities. They provide jobs and create a vibrancy we would not see without them. A key partner of these businesses are community banks. And banking locally is a simple yet powerful way to support the community. These banks typically reinvest a greater share of their revenues into the communities where they operate. Lending decisions are made by people who understand the local needs of families and businesses they serve.
Here are the top reasons to bank local:
Get the Same Services at Lower Cost
Most locally owned banks and credit unions offer the same array of services, from online bill paying to debit and credit cards, at much lower cost than big banks. Average fees at small banks and credit unions are often substantially lower than at big banks, according to national data. Studies show that small financial institutions also offer, on average, better interest rates on savings and better terms on credit cards and other loans.
Your Money Works to Grow Your Local Economy
Small businesses, which create the majority of new jobs, depend heavily on small, local banks for financing. Small and mid-sized banks account for more than half of all small business lending. Big banks, meanwhile, allocate relatively little of their resources to small businesses. The largest 20 banks, which now control 57% of all bank assets, devote only 18% of their commercial loan portfolios to small business. Community banks put money back into the community faster.
Keep Decision-Making Local
At local banks and credit unions, loan approvals and other key decisions are made locally by people who live in the community, have face-to-face relationships with their customers, and understand local needs. Because of this personal knowledge, local financial institutions are often able to approve small business and other loans that big banks would reject.
They Share a Commitment to Your Community
The fortunes of local banks and credit unions are intimately tied to the fortunes of their local communities. The more the community prospers, the more the local bank benefits. And so many local banks and credit unions are involved in their communities. Big banks, in contrast, are not tied to the places where they operate. Indeed, they often use a community’s deposits to make investments in other regions or on Wall Street.
Support Productive Investment
The primary activity of almost all small banks and credit unions is to turn deposits into loans and other productive investments. National banks can devote a sizeable share of resources to speculative trading and other Wall Street bets that may generate big profits for the bank but provide limited economic or social value for their communities.
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