If you're a Lexington-ite, you'll notice that on Financial Corner (what I've now dubbed the intersection of Nelson and Main Streets because of the location of both Wachovia and Suntrust Banks), CornerStone Bank broke ground last week.
It's been in a trailer (yes, a trailer) by Donny T's for the last year or so, but it looks like they're finally getting a brick and mortar structure.
Amidst the economic downturn and a year when many banks ended up closing shop (R.I.P. WaMu), CornerStone was one of the few banks nationally that opened its doors last year.
But what's more interesting to me, as a non-economist, is this movement from national to local banks.
Arianna Huffington, creator of the Huffington Post, in particular has been pushing the movement (dubbed "Move Your Money"). Basically she thinks it's crazy for Americans to keep supporting banks that not only got us into this bad situation, but then rewarded the wrongdoing company leaders with exorbitant salaries paid out of the national coffer. Local banks are looking out for the local economy and local people--not some big-shot in a corner office hundreds of miles away.
And Linda Hooks, Washington and Lee University professor of economics, told Rockbridge Reporter Alex Scaggs last year that local banks probably have a better handle on what's going on with their customers than national banks do--no surprise there.
"Economic theory says that banks work by gathering information and monitoring what’s going on with, say, a business they've lent money,” said Hooks. “The best way they can gather information and do that monitoring is by being right there on the scene. So a local bank probably knows more about a local business."
This was confirmed by Bank of Botetourt Senior Vice President Duaine Fitzgerald, who alluded that his bank is probably more likely to work with customers in a tough situation than a large corporate entity would be. For the record, Fitzgerald's bank wasn't involved in the risky lending that got many banks in trouble, and the bank therefore didn't have to take any TARP money.
Maybe, just maybe, by moving our money to local banks we can keep the focus on people, service and honesty. But maybe it'll just mean paying more ATM fees too.
--Stephanie Hardiman
We have been working hard and have joined the movement to help people see there are other choices to move their money. In our case we are advocating credit unions.
ReplyDeleteCredit unions are the new cool but largely misunderstood.
Credit unions are all about the community and giving back to their member owners. They are owned by the people and for the people... not just an elite few shareholders.
There is a great video contest in the voting stages right now to complement the Move Your Money campaign and show the power of credit unions and people helping people: http://www.youngfreehq.com/blog/music-video-contest-entry-8-james-robert-lay.html