Local Banking

Local Banking

Our section on Finance explained the way banking can affect climate change and where investments and loans go (Finance Link).

Banking affects who has wealth in other ways as well. The list of ways that banks have taken advantage of those with less money is extensive. Check cashing or lending companies are also filled with practices that create a cycle of poverty.

Large banks have been caught committing fraudulent practices, and yet, they continue to thrive due to their massive size and influence.

Communities have other options.

Smaller, local bankers tend to be more supportive of the community they exist in and probably can’t get away with some of the high fee structures that the mega-banks experiment with. 

Credit Unions and Coops are plentiful and have more of a social purpose as part of their mission.

Public Banks have existed for a long time, but there is a big resurgence pushing for more of them as part of the Wellbeing Economy. Public Banks can be formed by the government as a way to provide banking to the community with lower costs to customers. Additionally, a huge benefit to the local community is that the bank charter can also specify what type of loans the deposits are used for. And ultimately, bank profits can be directed back to the community, creating a positive feedback loop locally.

California is pushing for reforms on Public Banking. A State based bank is being formed and many cities are setting up local Public Banks.