Democratizing Money: Community Banks Are a Great Tool to Take Money From Wall Street, Bring Funds to Your Local Community and Get Control of Your Money

Participate in Your Community Bank to Get Local Projects Funded

Summarized by Kevin Zeese

This is a summary of a presentation given by Bill Thorington at the Economic Track of the Democracy Convention held in Madison Wisconsin on August 25, 2011.  Thorington’s biography and contact information are at the bottom of the summary.

My presentation will focus on the local level.  My background is in both commercial and community banking at the grass roots level. I became involved in community banking after being in corporate banking.  In the early 70s I found discomfort in commercial banking so I started a community bank.  In the end I lost my local bank to a huge bank that wanted it.  If a local bank becomes popular it becomes a target. Experienced it first hand and knows what to do next time, and what not to do. The life cycle of community banks will be discussed in the next session.

In this session my focus will be on how to work with community banks and why it is important to do so. Democratizing money means giving the power of money to the people.  Putting people back in control of their money is the foundation of participatory democracy.  Those who have our money have control and power over us.  The government is the first large entity that has our money but the government has to deal with other powerful forces including the Federal Reserve, big corporate banks, Wall Street – those are the people who decide where money goes. Their control of money is the opposite of democracy. Community banks are a method of democratizing money.

Your money is for the most part in local branches of corporate banks.  Or, your money is in the stock market – Wall Street has that too.  Generally, 401k’s and pension plans are with banks and Wall Street.  We do not have control of our money.  We can take little actions to change this.  It is a long, slow battle because the resistance is strong.  But, it can be done.  We’ve seen successes over and over again.

One of the easiest places to have power is localization, credit unions, and community banks.  It is important to support and promote community banks.  If you have a choice of Chase, Bank of America or community bank, opt for the latter. They are not perfect, still driven by profit and the shareholder need for dividends, but community banks are made up of people like you and me. You may know the owners by name or reputation.  They are usually principled people in your community.  Community banks are managed by your neighbors.   Get to know them.

Opt to bank at community bank and then get involved with the bank.  Get to know your branch manager or even the bank president.  You can do that with community banks.  Most community banks have citizen advisory committees.  Join them.  Attend board meetings of the bank. If  board meetings are not open to the public, by a share and go to the board meetings.  Listen to what is being said.  Get to know the directors. They will listen to the people.

Community banks mission it to put funds back into that community.  If the bank does not hear from members about what they want the bank will look to local activities, rotary clubs and other civic groups to figure out what the community wants.  If the bank is not told what to do they need to figure it out for themselves.  You have to physically go and get involved, make yourself heard.

One very important tool is the Community Reinvestment Act. The CRA requires banks to listen to their community and put a certain amount of their deposit funds, their capital, into the community.  If FDIC is going to insure the bank they are required to re-investment in the community. The CRA is a very powerful act that is not used enough by community activists.  People who know how to use it can get a lot done. If the bank is not responsive then go to the bank and ask for their CRA policy.  See if they are meeting their commitments.  Banks say what the regulators want them to say, but you can push them to actually live up to what they say and what is required.

You can write comments to the bank about community re-investment.  Tell them where the money is needed in your neighborhood.  These banks are regulated when the banks are examined by a bank examiner, something that happens about four times per year, one of the first things they look at is the CRA book.  They open it up and look for comments.  They want to see comments from their community. Even a hand written comment on yellow paper is something the bank examiner will ask the bank about to see what they did in response.  Did they investigate? Who did they talk to?  What did they do to meet the needs of the community in relation to the comment?

CRA is a great tool.  Not limited to big projects.  It can be as small as asking bank to be involved in your neighborhood.  It is a vehicle to get information to regulators who will require banks to respond.

Beyond that, just get involved – know the managers and the board. A good community bank should be represented by the community.  A cross section of the community should be on the board. Introduce yourself.  Tell them you want to be involved.

Another alternative is credit unions. Credit unions are not banks, but they represent you because depositers are part owners of the bank.  The rules on credit unions vary from state to state. While the CRA does not apply there are similar requirements for credit unions.  If you bank at the credit union talk to the principals of the bank.  The same approached to community banks apply here.

We will be talking about state banks in the next session.  Community banks and state banks can work in great synergy.  They allow community banks to get in larger community project that they cannot fund on their own.  The state bank can become a partner with the community bank and avoid the need for community banks to grow and risk the type of activity that will end in their ultimate destruction.

State banks are tremendous thing to really get public control of banks.  We have one in this country, North Dakota.  We should have 50.  Every dollar produced goes into a state banking rather than a big bank.  Fourteen other states are working toward state banks.  The movement has started.  Get involved.  Push to understand publicly own banks.  This is how we will really democratize our money.  (Google state banks – information is widely available.)  You can find the coordinators  who are working in each state quite easily on the web.  Email them and get involved.  Find out how they started and follow their path.

If you have the opportunity to get involved with a community bank, do so at whatever level you are comfortable.  They are a great way to democratize the money supply and focus resources at the community level.

Bill Thorington, from Humboldt County CA, is more than just a political and social activist. He is a retired community banker with a legal, scientific and business background. As an entrepreneur and founder of many businesses, he has personally experienced the real world of localization vs. corporatization. His email is

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