Protecting Community Banks From Consolidation


NEW YORK, NY (February 22, 2018) - Consolidation in the banking industry may reap rewards for investors, but it also restricts access to financial services for many communities throughout the United States.

Community banks support many geographic areas underserved by larger banks; more than 16 million people, or one in three counties, rely exclusively on local banks and have no physical access to large banks, according to American Banker. Local banks fund over 60% of small business loans, while holding only 20% of all banking assets.

“Community banks are not only more highly capitalized than larger institutions and therefore better equipped for economic downturns, but their local focus and accountability make them distinctly pro-consumer. These local institutions operate a relationship-based business model that incentivizes customer service and stewardship... [they] reinvest their proceeds into the communities in which they operate, promoting economic growth that begins at the local level,” American Banker reports.

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