No Better Time for Businesses and Consumers to Bank Locally

In the aftermath of the financial crisis and Wall Street regulatory reform, local businesses and consumers in the Lincoln County/St. Charles may be scratching their heads and wondering about the future of the banking industry and, more importantly, what it means for them. Truth be told, if a community bank has always been where you’ve put your money and received your loans, then you already know the benefits of banking locally.

Now is a time of monumental change for the banking industry as a whole. With the Dodd-Frank Act now the law of the land, federal regulators are busy devising the rules that will, in many ways, change the way that many banks do business. One thing the law made crystal clear is that Main Street community banks such as Bank of Old Monroe are in a separate class from the Wall Street megabanks. Not only is this distinction important in Washington, it’s also critical for those of us living in Lincoln County/St. Charles County areas.

April is Community Banking Month, a time to recognize the important contributions community banks make not only to our local economy, but to the nation’s economy, as well. The fact is that, in the wake of Wall Street reform, there is no better time for businesses and consumers in our area to do business with a community bank. Not only do community banks offer the same products and services as larger institutions, but they are home grown and home raised companies that are deeply integrated into the fabric of our hometowns.

Community banks’ special niche is serving the needs of local families, businesses, and farmers, while the nation’s megabanks are structured to place a priority on serving large corporations. Unlike larger banks that may take deposits in one state and lend in others, community banks channel most loans to the neighborhoods where their customers live and work, helping to keep local communities vibrant and growing.

Community banks have always considered character, family history, and discretionary spending when making loans. They offer nimble decision-making because decisions are locally. And because community banks are small businesses themselves, they understand the needs of small-business owners. In fact, community banks are the primary lenders to small businesses and farms. Even though they compose just over 23 percent of the banking industry by assets, community banks with less than $10 billion in assets make 56 percent of small business loans.

When you walk through the doors of a community bank, you can easily find, talk to, and shake the hands of the bank’s officers – unlike the CEOs at megabanks who are headquartered in far away offices, away from daily customer dealings. A community bank’s board of directors is made up of local citizens who have a personal stake in growing the town and city where they live and where their bank does business. Community banks make significant contributions to their neighborhoods.

Many customers find the service at a community bank much more personal and friendly. That’s because community banking is a relationship business. Think about it: if a community bank does not treat its neighbors well, they won’t come back, and the bank will soon go out of business. Big, faceless banks can weather bad service, but community banks simply cannot.

As the future of big banking continues to take shape, businesses and consumers in our area should know that community banks will always be there to help them fulfill their financial needs, just as they were before the “big bank” debacle.

Darrell Harke,
President/CEO of Bank of Old Monroe in Old Monroe, Moscow Mills, O’Fallon, and Wentzville.