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Buck Up, the Future Is Bright for Community Banking

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While we at the Independent Community Bankers of America certainly sympathize with concerns over industry concentration and regulatory burdens, and speak out on these issues every day, I fundamentally disagree with the doomsday scenario laid out by Stephen N. Ashman ("Don't Let Your Babies Grow Up to Be Bankers," June 19).

I have always taken great pride in the fact that I was a career community banker, and I know many community bankers throughout the nation who are proud to bring their sons or daughters into the ranks of community banking – not only because they believe in the community bank business model and the good they do for their communities, but also because they see a bright future for this great industry.

There's no doubt that the relationship-based business model of community banks meets and, in many cases, exceeds the needs of Main Street communities across the nation, many of which have been abandoned by the megabanks. Community banks make common-sense loans, often to small businesses that cannot access credit from the megabanks. Our industry also has made progress on the policy front. Reforming the Federal Deposit Insurance Corp.'s assessment base and the Securities and Exchange Commission registration requirements has helped community banks compete with the largest financial firms. Meanwhile, it is these large institutions that are suffering a crisis of public confidence. Too-big-to-fail has become a plague, while the reputation of community banks has soared to new heights. The risky practices at and implicit taxpayer guarantee for these systemically dangerous firms are driving consumers to community-based banks.

While the zero-interest-rate environment and financial and regulatory fallout from the recent Wall Street financial crisis has certainly made it difficult for community banks, there's no reason to think that they won't make it through this challenge as they have through so many others throughout our nation's history. In fact, they'll make it through current challenges stronger than ever thanks to sound banking practices and positive consumer sentiment about locally focused banking options.

Bottom line: the community banking industry is evolving with the times, and I and thousands of other community bankers out there continue to have faith and confidence in a bright future for our industry, and we will tell our children that any day.

Camden R. Fine is the president and CEO of the Independent Community Bankers of America.

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Comments (1)
I don't know. I can't see how the future could be bright for community banks.

The business model can not continue to work can it? We are fast approaching a day and age when there is simply no need for a physical location for a bank branch.

Think about how Amazon.com is killing retailers right and left. They have a huge competitive advantage because they do not have the overhead costs associated with a physical store.

Online lenders will be able to offer more competitive rates and ultimately put the community bank out of business, or at the very least, require them to downsize their physical space and staff drastically.

How can the business model continue to compete?

Adam Hoeksema
Co-Founder - ProjectionHub
Posted by Adam Hoeksema | Sunday, June 24 2012 at 6:44PM ET
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