How We See It: Local banks are sound as giants struggle

Written by TSI Editorial Board | 15 January 2010

Resolutions usually manifest in the form of weight loss, quitting bad habits or picking up good ones. In the year that was 2009, the global recession may have been a great teacher – if we choose to take the lesson.
Resolutions perhaps should be taken more seriously as the realities of last year’s lessons were frightening. We would like to offer our the community a challenge that could pay off for all of us: Invest in your local banks.
While taxpayers floated billions of dollars to keep large financial institutions from collapsing, community banks across the nation did not participate as deeply in the gluttony of bad loans fueled and driven by recklessness and irresponsible motivations.
The big banks on Wall Street have had a record year, making record profits while returning to the over-leveraged practices that brought our economy to the brink of disaster. Even as they use taxpayer money to award themselves record eight-figure bonuses using taxpayer money, they have cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout.
But since April, JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo – all of which took billions in taxpayer money – have gutted lending to businesses by $100 billion.
Meanwhile, community banks in some areas of the country have struggled or have been taken over by the FDIC. As progressive blogger Arianna Huffington has pointed out, “The government policy of protecting the Too Big and Politically Connected to Fail is hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.”
In Coffee County, that has not been the case. Banks here have not over-leveraged themselves and remain solvent and sufficiently capitalized.
Local banks support and help to grow businesses that pay taxes here, provide jobs for our neighbors, as they finance the dreams of local homebuyers and entrepreneurs.
The value to the economy of local banks, contrasted with the bad behavior of the big Wall Street banks, inspired Huffington and others to start a movement to “Move Your Money” - taking whatever money you may have in a big bank, and moving it to a community bank where it can do some good.
So this year, make it your resolution to send Washington and Wall Street a message while giving a boost to the local community. Move your money from the big banks to the ones back home where it can support our community.