Why We Need Community Banks
My first job was as a bank teller at a small-town bank. The bank sat on the corner of one of the town’s main intersections, and when I say “main intersection” I mean one of two stoplights in the small community of 3,500 people.
The bank opened in 1906 and the first loan made was to buy corn for spring planting. It was the only local bank to survive the Great Depression when many banks failed. The bank has remained small over the years, with only three branches today even as many, many other banks have swelled to dozens of branches and national banks boast thousands of locations.
The busiest time of the week was Friday afternoons after 3:00 p.m. when two of the local businesses paid their employees — via check — and those employees came to the bank to cash their checks. I’m not that old, and direct deposit was common, but these two employers still used the old-school check method.
I worked at the bank for almost six years, until I graduated from college. I knew many of the regular customers by name. Eventually, I became a loan processor and worked to approve home loan applications. The bank was also well-known for its small business lending. I felt like this work was important: the bank truly worked with customers to make their dreams come true.
April is Community Banking Month in the United States, a celebration of the small banks that power their communities. I never really left the community banking world. After college, I went to work for a software company that served community banks and credit unions for 15 years. And now, as a freelance writer, I’ve written for publications that target community banks and other tech companies that have community banks as clients.
But banking is often opaque and, until people run into a problem with their bank, they don’t often consider the size of the bank when opening an account or taking out a loan. They don’t realize the outsized impact that community banks have on their local economies — and the level of service they provide to their customers.
What is a community bank?
For context, it’s helpful to understand what we mean by “community bank” — at least within the United States.