That is the essence of community banking.
Real people. Real lives. Community banks and credit unions still have a real impact.
“It’s a Wonderful Life” has become an iconic holiday classic film, and Jimmy Stewart as George Bailey has become an icon of what a true community banker should be. One who believes in helping out a neighbor, investing in people, making decisions based on local knowledge, and faith in the idea that if each individual in the community can do a little better, the whole community can do a lot better.
But in a world of mega banks, digital-only platforms, and algorithm-driven financial decisions, there is still room for our own George Baileys and community banking.
Community banks and credit unions, or Community Financial Institutions (CFIs), play an important role in supporting vibrant, growing, sustainable communities with an emphasis on providing the capital needed to foster locally-owned small businesses.
You cannot underestimate the power of these small businesses as the backbone of the American economy. According to the U.S. Small Business Administration, 99.9% of all businesses in the country count for almost half of all private employment.
And where do these small businesses do their banking to build their dreams and strengthen their community? That’s right. Their local community financial institution.
CFIs focus on relationship-based service, and consider the full picture including local market conditions, business cycles, and the character of the borrower. Lending decisions are made by people who know the community, and financial advice is tailored to the individual. Often, the banker knows the customer by name, and their children may even attend the same school. This person-to-person approach is a hallmark of community banking, just like we see at Bailey Building and Loan in It’s a Wonderful Life.
And let’s not forget one of the key lessons about banking from the movie: the money invested in the local CFI in the form of deposits gets reinvested into the local community in home mortgages, business start-up loans, and the ongoing financial vitality of the local economy. The money isn’t at Bailey Building and Loan: it’s invested in another person’s house and another’s loan.
George Bailey himself even spearheads Bailey Park, an affordable housing project right in his hometown of Bedford Falls. (That’s social purpose in action.)
Frank Capra, the creative voice behind It’s a Wonderful Life, had it right. Community banks and credit unions are more than just places to deposit checks or apply for loans. They are the economic engines, the community partners, the trusted advisors supporting growth, opportunity, and success at the start-up, brick and mortar, picket fence, local grass-roots level.
As the financial industry becomes ever more global, cold, and impersonal, the role of CFIs becomes even more important, not less. Because when these local institutions thrive, the entire community benefits.
At this time of year, take a moment to appreciate the value of your local bank or credit union. Or as George Bailey puts it:
“Merry Christmas, you wonderful old Building and Loan!”