Top 5 Reasons To Choose A Community Bank Or Credit Union

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1. 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 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.

2. Put Your Money to Work Growing Your Local Economy

Small businesses, which create the majority of new jobs, depend heavily on small, local banks for financing. Although small and mid-sized banks control less than one-quarter of all bank assets, they 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 percent of all bank assets, devote only 18 percent of their commercial loan portfolios to small business.

3. 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. In the case of credit unions, control ultimately rests with the customers, who are also member- owners.

4. Back Institutions that 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. This is why many local banks and credit unions are involved in their communities. Big banks, in contrast, are not tethered to the places where they operate. Indeed, they often use a community’s deposits to make investments in other regions or on Wall Street.

5. Support Productive Investment, Not Gambling

The primary activity of almost all small banks and credit unions is to turn deposits into loans and other productive investments. Meanwhile, big banks devote a sizeable share of their resources to speculative trading and other Wall Street bets that may generate big profits for the bank, but provide little economic or social value for the rest of us and can put the entire financial system at risk if they go bad.

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  • Steven Berge

    It feels good to divest from mega corporations that put profit over people too. Helping corporations that routinely cheat and cause economic crashes is self defeating. Years ago I pointed out to my wife how Wells Fargo was cheating her and she finally left them. It’s up to the people to cut these “too large to fail” organizations because the government they own will never do it.

  • As long as we are stuck using money, I very much agree the community banks and credit unions are a vastly superior choice for banking. But we must be careful to read between the lines. Community banks and credit unions don’t necessarily decide by default to do “the right thing”. Like everyone else in our present culture, the individuals who make the decisions for community banks and credit unions are seeking to maximize their profits to one extent or another. They work within the context of the current “business” paradigm. If the bank or credit union is community “owned”, then the decisions that are made by those institutions will reflect the consciousness of those active enough to participate in the decision making processes. What will the criteria be for the decisions to loan money, for deciding how to handle profits and losses?

    The community bank or credit union that makes decisions on a “not for profit” basis or better yet, on a “for the sustainable well being of our shared global civilization” basis, doesn’t exist. Money is a very slippery slope. Essentially, people decide how money is used or not used. Any type of banking institution is a conglomeration of monetary interests for a particular community of individuals. We already know today to a great extent, how that particular conglomeration of interests is distributed. We see the discussion of the growing global inequality of wealth distribution daily. In the United States, we have lost control over whatever degree of democracy we ever had to the monetary interests who now run the federal government like a corporate branch office, deciding who gets elected, what laws get passed and whose financial interests are being served. We so very desperately need to move beyond money in our relationships with one another and with the living systems of the Earth. If humanity is ever to arrive at a truly sustainable future, it will not be through institutions that promote and support the use of money.