Author: Chip Filson

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The People’s Voice: Saint Lawrence FCU Owners Veto Merger

St. Lawrence is the largest county in New York State.    Its 100,000 residents live in a rural mix of small towns and farms in an area called the “North Country.”   Saint Lawrence CEO Todd Mashaw says he can see the bridge to Canada from his office window.   Montreal and Ottawa are closer to credit union’s Ogensburg head office than Syracuse, the nearest large city in the state.

Prior to his upcoming September 30 retirement, CEO Mashaw’s final project was a six month effort to negotiate a merger with the $806 million SeaComm FCU in Massena, New York.   In the merger video he states:  “If the merger goes through I retire and if not ,  I retire.”

When the final vote was announced in August the result was 2,428 (70%) against to 1,023  (30%) in favor.  This overwhelming rejection is unprecedented.   The approximately 30% of members who voted is the highest participation in a merger vote where proxies are not involved.

The Merger Project

The selling of the merger proposal was a joint “full court press” of the two credit unions’ CEO’s.   The special web site “merger page information” contains copies of the many communications to members including a video with the both explaining why they believed this action was necessary for the future.

The hour long video on the site is a free flowing discussion between the CEO’s presenting their case for the merger.  They cite industry merger trends, multiple predictions about future technology and competition, the need to change now and a frank conversations with staff and members, not all of whom were in favor.

The documents supporting the combination on the site are numerous.  These include the schedule of  ten town hall meetings and handouts, a discussion at the Annual meeting,  a joint letter from both boards, a merger timeline, press releases,  special mailings to members, merger FAQ’s, credit union data comparisons and merger myths.

This four month concentrated marketing blitz  culminated in the mailing of almost 11,000 ballots with the Special Meeting Notice and letter detailing the merger plans.

Why Did the Members Reject the Merger?

Saint Lawrence FCU was established in 1954 for the employees of the St. Lawrence State Hospital and their families. It will be 70 years old in 2024.  It became a community charter in 2002. Mashaw arrived in 2005 and has been CEO for thirteen years.

He acknowledges in the video that the proposal was disruptive and caused some friction with staff and members.    He said members were passionate in  opposition deploying several hundred yard signs and wearing T-shirts opposing the plan.

Saint Lawrence FCU’s Facebook has multiple member questions about fees, possible branch closings, ratio comparisons, even  one objecting to press announcements “as if it is a done deal.”

Mashaw commented, and he chose the word carefully, that there were “conspiracy theories” promoted about the merger.  These  included questions about whether he was receiving any special benefit should it proceed.  This was responded to in merger myth # 7.

Members As Fans

Many factors undoubtedly influenced the outcome.

Despite the volume of information, some of the logic seems self-contradictory.  Both CEO’s argued change is inevitable to confront  industry trends, technology competitors and provide staff with enhanced professional opportunities.

Yet throughout the video both assure members they will experience virtually no changes:  the same branches remain open, no employee will lose their job and both organizations have similar cultures.

As they summarized in the video:  “These are two good credit union taking care of St. Lawrence country members right here that want to continue doing the same thing, but together.”

This effort to assure members even led the CEO’s to agree that the Saint Lawrence signage will stay on the branches and current head office.

There may be two other factors that influenced members’ voting.

Through June 30, 2023 Saint Lawrence has reported “off the charts” financial performance.   The 12-month growth rate in loans is 25%, shares 15%, members 5%, and loan originations for the first six months 47%.  The net worth ratio is 10.6%.  The average salary and benefits per employee has increased from $65,000 to $88,000 or 35%.

The growth numbers are three to four times the national averages at June 2023 for all credit unions.

These results were accomplished when the primary focus of the entire senior management team and board was on the merger effort, including meetings with SeaComm staff on potential organizational roles.

A second factor, is that especially in rural New York state, local matters.  People want to do business with firms they know and trust.

One FB member post summarized his opposition this way:

Maybe it’s small town thinking.

1- bigger is not better,

2- competition is a good thing especially in banking.

3- If it ain’t broke don’t fix it .

The SLFCU is as strong as its ever been. 

What’s Next?

Mashaw leaves at the end of the month, but is staying in the area, remains a member and is available per contract for one year.

The nine-person board will decide next steps whether that be an interim CEO and whether to initiate a full search.

When members campaign using yard signs, wearing T-shirts opposing the plan and post strong opposition on the credit union’s Facebook account, these actions suggest the board and senior leaders were not on the same page as the members.

As one member posted: Haven’t see a SLFCU member who is FOR this merger except the CEO and Bd.

The credit union has been a part of the community for 70 years.  It is locally controlled and intimately involved with dozens of charities, festivals and special events.

The member-owners fought to keep the organization they built, support and believe in.   This is the cooperative democratic process in action.  The people’s voice has spoken.

The effort to retain their own, very successful member-owned financial firm was possible because of credit union design.  More importantly this loyalty is the intangible but real goodwill that is the foundation of every credit union’s strength.

 

 

 

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A Democratic Renaissance Emerging In Credit Unions

Three events, two ongoing, one finished for now, have centered around member voting on the future direction of their cooperatives.

Each election is triggered by specific circumstances.  But they illustrate the benefits of going to member-owners for approval.

Voting is the essence of democratic governance, whether this is for local school board candidates, a political office or national politics.

The instinctive “rightness” of individual voting is so obvious that  the most authoritarian regimes  put on a charade of democratic process.  For even the most dictatorial leaders, voting connotes legitimacy.

In America, freedom and voting are inextricably linked.   When those in power seek to perpetuate their positions, manipulating or questioning the voting process is an ever-present threat to democratic rule.

A Frustrated Member’s Article

One long-time credit union member expressed his exasperation with his Board’s “closed shop”  elections in this opening of a public article.

I asked a friend recently if she could provide an answer based on the following clues:

1) It has billions of dollars in assets;

2) The overseers are not elected, rather;

3) they are appointed among themselves;

4) there are never any elections; and

5) all meetings are closed.

My friend guessed Belarus – a good guess, but Belarus has elections.

The answer is Orange County’s very own SchoolsFirst Federal Credit Union – the largest financial institution in the county and the fifth largest credit union in the nation. . .

The rest of the critique, Schools First . . .Democracy Last, by Dr.  Barry Resnick is here.

What makes credit union design unique is democratic governance–each member has one vote no matter their  savings and deposit balances.  Federal credit unions prohibit proxy voting  further reinforcing each member’s  ballot sovereignty.  Not all state charters have this limitation.

In credit unions, the people rule.  Cooperatives are, in theory, on the front lines in the practice democratic governance.  This was central to their public purpose and tax exemption. Since there have always been more poor people than financially well off, credit unions were intended to be a means to enhance economic equity for all.   Through member loans, the bulk of the population was to have  financing access that  those with wealth easily take for granted.

Moreover, voting for directors converts private, closed decision making in institutions into public accountability.

But to work, the people need to be informed even educated as to their owner role.   Voting is one of vital means for this process.   Candidates or leaders present their priorities to the membership  and seek support.

Democracy is much more than rules, bylaws, or following Robert’s Rules of Order at the annual meeting. These details do matter, but democracy requires a commitment for leaders to take their ideas to the public versus bureaucratic maneuvers to perpetuate positions of power.

Without the test of the ballot, incumbents may not see things as they are.  Rather they see the things that confirm to their assumptions or preferred way of looking at the world.

The Growing Distance

When  credit unions were predominately local,  member voting may be less vital because they see what’s happening with their own eyes.   When credit unions grow large, distant and generic, their responsiveness via democratic process becomes more crucial.

Credit unions have proven to be a success in creating very large, financially successful depository institutions.   But they rarely cultivate their members’ ownership role.

Absent voting where there are more candidates than open seats, credit union strategic priorities reflect incumbent power not policies  supported via a public contest of ideas and priorities.

When boards are on top, any public voting can be viewed as  threatening to their position.  Without leaders efforts to build “civic virtues” democracy can become form without substance.

Why Voting matters

“Democracy holds us together. We are a country rooted in the rule of law, where the protection of the rights of all people is paramount.” (G-20 Press release) Credit unions are a small but vital part of the democratic ethos that Americans often take for granted.

Member  voting is how their ownership  rights are cultivated and protected.  NCUA has long turned its back on any role in this responsibility.

When the will of the people is circumvented, the result is a growing erosion of member influence.  It is easier to lose member confidence than gain it.  Becoming customers versus owners, makes it easier for members to move accounts to a better deal whenever than comes along.

The Need for political courage

Democratic leadership is hard.  It takes courage and maturity to control the  human instinct to accumulate and maintain power.

Cooperatives  must evolve not merely financially, but also in their political  role with members if they are to remain bearers of their trust and unity.   Institutions should work for people, not the other way around.

Today, one can easily identify institutions and activities in the cooperative system that appear more motivated by self-interest than mutual benefit.

The first rule of democracy is the willingness to discuss, debate and argue about what troubles us.   Truth is not achieved by hiring a PR firm to sell a story or presenting a one-sided marketing campaign that has all the hallmarks of propaganda.

Transparency with full and timely information is the key to democratic practice.  I will follow with  commentary on three situations that I believe show the upside of cooperative democracy in action.

Also, a current  example of a credit union’s promotion of open board elections at Frontwave is described in this July 6 blog, Here They Go Again.

 

 

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Going for the Green at USC

A source of federal funding in the Inflation Reduction Act will soon be making grants to accelerate solar energy investments.

The example of a credit union’s preparation to access these funds is from Next City an online reporting blog.

The case study by Bianca Gonzalez was posted this week and is  edited for brevity.

A More Equitable Approach to Financing Our Green Future 

The USC Credit Union, a certified CDCU and CDFI, recently developed several green lending products that make emission-reducing energy upgrades more equitable for communities near the University of Southern California campus in South Los Angeles and East Los Angeles.

In the 2021 Inflation Reduction Act (IRA), the Greenhouse Gas Reduction Fund creates the opportunity for CDCUs and CDFIs to take on more risk and bring emission-reducing and cost-effective energy products to communities that need them most.

The Act provided the Environmental Protection Agency with $27 billion for the Greenhouse Gas Reduction Fund. Through competitive grants, the fund will support financing clean energy and climate projects that reduce greenhouse gas emissions. This program will also meet the requirements of the Justice40 Initiative that 40% of the benefits are for federal investments to disadvantaged communities.

For example a 2021 study on US solar adopter patterns  shows that solar adopters tend to be higher income. In 2019, the annual median solar adopter income was about $113,000, while the overall U.S. median income was $64,000. The difference in annual income between solar adopters and the general population demonstrate that lower-income communities need equitable solar upgrade solutions.

Many USC Credit Union members have been left behind by traditional financial institutions, disproportionately impacted by climate change, and underserved due to a lack of accessibility for Hispanic and immigrant populations. These  factors highlight the need for green lending in low-income Hispanic communities.

USC Credit Union’s Preparation

“South Los Angeles in East Los Angeles are now primarily Latino communities,” says Gary Perez, CEO of USC Credit Union. “Several decades ago, the South Los Angeles area was primarily African American. So as the racial makeup changed, we had to understand more about the needs of the Latino community. We turned to Juntos Avanzamos for counsel.”

Juntos Avanzamos is a designation for credit unions committed to serving Hispanic and immigrant consumers. USC Credit Union became a designated Juntos Avanzamos CDCU  by Inclusiv, a CDCU membership organization and CDFI intermediary.

“We had to understand more about the first and second Latino generation members,” Perez says. Despite how convenient remote banking tools are, “the consensus is that these individuals prefer to bank in person. Why would these people prefer to commute to a bank? One hurdle is that they can’t access the same tools that English preferred or English native people can. So we’ve developed a new bilingual mobile banking system.”

With accessibility tailored to the Latino community and grants from the Greenhouse Gas Reduction Fund, USC Credit Union could  take more risk and loan to  members with a wider variety of financial circumstances.

The grant funding “will be used as loan loss reserves and allow us to lend to credit-challenged or income-challenged individuals who may have nontraditional sources of revenue,” Perez says. “We believe this use of IRA funds will do more for the inner city community.”

 Neda Arabshahi, Vice President of Inclusiv observed that more than financial products are necessary. “They need to be paired with technical assistance, training in how to vet contractors, build partnerships with  clean energy services and education of consumers,” Arabshahi says.

Perez and his USC Credit Union team completed the Virtual Solar Lending Professional Training and Certificate Program.  The course was developed by Inclusiv and the University of New Hampshire (UNH) Carsey School of Public Policy.

“Those who benefit most from lowering their cost of energy are those  struggling with the high cost of housing here in Southern California,” Perez says. “By providing accessible solar financing, we can  lower the energy costs for those individuals and allow them to maintain households in this expensive L.A. market.”

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The Power of the Spoken Word

Words matter.  It is how we connect with each other.

Whether by blog post or biblical story,  words are how we navigate every aspect of life.

They can get stale, “decay with imprecision, will not stay in place,/Will not stay still,” as T.S. Eliot writes.

They get worn from overuse until reality brings us back to their core meaning.

Poetic usage has the potential to change how we understand meaning, transience versus transformative experience.   Here is  English writer Joesph Pearce describing poetry’s potential:

Poetry is the still, small voice of calm in a world gone mad with distraction. It finds us space to breathe. It allows us time to think. It takes us out of time and space into the realm of metaphysics. It takes us from the transient things to the permanent things, from the things of time to the things of eternity. It takes us to goodness, truth and beauty. Poetry takes us from the five physical senses to the five metaphysical senses: humility, gratitude, wonder, contemplation and dilation.

The Power of Voice

When I saw this poetry video “musical”  the power of poetry became even more dramatic.

“The forgotten dialect of the heart”

(https://www.youtube.com/watch?v=7R0zvidlfDs)

 

 

 

 

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Affinity Credit Union Sues Apple, Inc.-the largest Consumer Tech Company in the World

In August 2023 Apple reported its June quarter sales of $81.8 billion and profit of $19.88 billion.  It has a market capitalization of almost $3 trillion and a price earnings ratio over 31 times.  It is the world’s largest and most powerful consumer-focused tech company.

Why would a small midwestern credit union sue over the fees Apple takes when its members use the iPhone’s pay-on-contact solution?

Jim Dean is the CEO of the 14,000 member, $147 million Des, IA Affinity Credit Union. It was chartered in 1948 to serve the workers at the local Firestone tire factory.   The credit union’s main office and plant are still within sight of each other.  The credit union is the first plaintiff on the suit.

Dean is a lifelong credit union professional and believer. He states, “This is not frivolous.   There are many reasons to feel optimistic about the outcome.  Either a win or loss will have a significant financial impact.”

Affinity was the initial, lead litigant.  Last October the complaint was amended to add GreenState, IA  and Consumers Cooperative, ILL credit unions.   “When I searched for support, many CEO’s were unaware that this pricing situation and Apple Pay exclusive to iOs devices even exists.”

Dean continues: “I learned their apathy comes from a lack of transparency from the largest EFT processors. If we don’t see this growing expense defined at the contactless transaction level, how would we know?”

The Case in Summary

The 54-page Amended Complaint was filed in October 2022 in the United States District Court for the Northern District of California against Apple, Inc.

The central issue is that Apple refuses to allow competing mobile wallets from using the iPhone contactless payment system. This allows Apple to charge fees for a service that other tap-to-pay alternatives do not charge for.

The fee applies to banks, credit unions, and other payment card issuers for use of the tap-to-pay function on the Apple Pay app.

The cost is 15 basis points on each credit card transaction and a flat fee of 0.5 cents on debit card transactions. These fees come out of the fees that merchants pay to card issuers. Apple prohibits issuers from charging them back to their customers.

By contrast, when customers use similar tap-to-pay apps (such as Google Pay, Samsung Pay and a variety of bank sponsored apps) on Android mobile devices, issuers are not charged any fees at all. In 2019, Apple charged issuers $1 billion, and those fees are predicted to reach $4 billion in 2023.

The lawsuit contends that Apple can charge those fees because it improperly does not let other payment apps (again, such as Google Pay, Samsung Pay and a variety of bank sponsored apps) have access to the Near Field Communications chip, or “NFC chip”, on its mobile devices.  This prevents other payment apps from offering a tap-to-pay service on Apple devices that would compete with Apple Pay.

The suit alleges that this violates the antitrust law.   The credit unions are seeking both damages for their class and an injunction against future anti-competitive behavior.

The goal in addition to damages is to force Apple to change its policy of prohibiting other mobile wallets from having access to the NFC chip contained in its products.

Going Forward

Apple’s motion to dismiss is still pending.  If it proceeds, there would be discovery and the drawn out legal process.  In all probability the case will go on long after Dean retires.

Apple expects to sell more than 200 million more iPhones worldwide this year and is increasing its total market share versus its rivals.

Dean believes, “Most credit unions are up in arms about Durbin, part 2 ; but these  leaders are completely in the dark about this growing expense.”

This is why starting now matters: “We are doing this because some day, people are going to wake up and realize that we have a really serious, expensive problem on our collective hands. I’m not looking for headlines, but simply trying to change what will become a massive concern when people understand the gravity of this.”

But there is also Dean’s spirit of standing up for the common member.  “Big firms pick on the weak.  And can become economic bullies in the “free market.” That’s why we have coops.”

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Labor Day from Ukraine

The first day of school.  Pupils of the first grade attend a lesson in a classroom set up in a subway station in Kharkiv, on September 4, 2023. Children in Kharkiv attend classes in subway stations due to the threat of Russian shelling.

The road ahead.

 

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Truth Telling Gradually

“Tell all the Truth but tell it slant —”

By |

Tell all the Truth but tell it slant —
Success in Circuit lies
Too bright for our infirm Delight
The Truth’s superb surprise

As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind —

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What “People-Helping-People” Means—A Cooperative Labor Day Story

Many credit union practitioners describe their employment satisfaction by citing the credit union slogan of People Helping People.   This explanation is contrasted with the traditional business priorities of profit, market share, growth and personal financial rewards.

There are definitely credit unions whose culture and employee interactions exemplify this aspiration.  In practice however, many member interactions are straight forward: opening accounts, making loans and other service assists that mirror those of many other community financial institutions.

When a consumer or member really needs “help” the circumstances are often not pretty.   There are financial problems frequently aggravated by other issues of health, job loss or family misfortune.   “Helping” in these situations means the credit union and its staff are now becoming more involved with a member’s circumstances.  They learn about personal difficulties and must often become part of a solution.

“Helping” Starts at the Top

In a recent CEO’s monthly report to staff there is a case study of how the credit union tries to implement this oft quoted standard.

The CEO reminded staff that he puts his email address in the member’s monthly newsletter and invites them to “talk with him.” He wants to recognize their role as owners.  This also demonstrates the credit union’s vision of being their “members most trusted financial partner.”

On August 15, 2023 a member wrote to the CEO as follows (names omitted for privacy):

Dear Mr. (CEO):

I was a previous member of the credit union a few years ago and I am a current member as of 11/2019.  I’ve had some life circumstance and made some mistakes as many of us have.  I tried and I’m still working really hard to do better and to be better financially.

I’ve tried to get a loan to consolidate my debt but the only answer I get told is no.  Which is discouraging.  After adopting my niece and nephew at 19 months, who just happen to be twins, like me, I’m just trying to make ends meet.  They are now 15 years old, and like any other teenager, have their share of troubles.   I just want to be able to pay off all my bills, including the debt I owe to you, so that I can spend more family time with them without struggling. 

Thank you for taking the time to read this. God bless!

The CEO asked two staff to call the member, learn about her situation, and see what the credit union might do. Could she pay us back?  Is this where we might make a difference “one person at a time?”

On August 22, 2023, just seven days later,  the member wrote back to the CEO as follows:

Good afternoon Mr. (CEO’s name).

I just want to say thank you for trusting me.   There are no words to describe how grateful I am to you and your staff for giving me a second chance. I can breathe and enjoy my family with peace of mind. 

I failed to mention my sister is in the late stages of dementia.  I can now possibly visit before she succumbs to her illness.   Thank you again, from the bottom of my heart for lightening the financial burden I’ve been carrying.  I hope to do more business with the credit union in the future as I pay down my second chance finance with you all. 

God is good!  Have a Blessed Day.  Thank you.

A Labor of Service and Peace of Mind

The CEO explained the restructure saved the member over $450 per month in payments.  It may be years before the credit union knows the outcome of the story.   The two credit union employees did the “hard work” by investing their time and experience to find a better way for the member.  They went beyond the credit score and payment history to see who she was and her commitment to learn from prior mistakes.

All members have choices of financial services, even those in difficult situations where predator’s options are close at hand.

This credit union has almost 65,000 members, but believes in serving each member individually, one at a time. 

This is why this cooperative team and millions of others are proud to be part of organizations fulfilling the at times difficult jobs of People-Really-Helping-People.  

As this member might say this holiday weekend, may your labors in coops continue to bless for years to come.

 

 

 

 

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The Greatest Credit Union Market Opportunity

I subscribe to a resource called Visual Capitalist +. The firm transforms data into  pictures and graphs that present the meaning from the numbers.

Below is an example of income distribution in the US using information from 2010.  I suspect the outcome would not be much different today.

I believe this visual illustrates where credit unions have their largest market opportunity.   If the cooperative’s goal is to serve the greatest number of members, versus the members with the greatest wealth, then 80% of Americans owning less than 7% of the country’s financial wealth should be the primary target.

This distribution  is one reason Congress created cooperative credit unions founded on self-help.

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Why I’m Writing a Book

No, not me, but a kindred spirit.

Oscar Perry Abello  is the Senior Economic Justice Correspondent for Next City.  I have reprinted excerpts of his stories about startup credit unions and other community financial firms, especially CDFI’s. To find these just fill this blog’s search function with “Oscar Abello.”

In the following post he writes about withdrawing from his reporting job to write a book.

As you read his reasons, think about credit unions whenever he mentions “community banks” and their declining role in communities.  Ask whether cooperatives, in a similar manner,  are moving away from their core strengths?

His goal is to document the need for community focused financial institutions which he describes as “local fountains of money.”  Here is his “mission’ statement.

 

“The rumors are true.

“I’m going on book leave for the next few months. I’ll be working on a book, under contract with nonprofit publishing house Island Press, that makes a case to take back the banking system for communities. It will build on a lot of the reporting I’ve done right here for Next City’s newsletter The Bottom Line, especially over the past three years or so — quite an eventful period for the banking system, especially this year. . .

The Vital Issues or Just a Broken Record?

“Over the next few months, I’m looking forward to diving more deeply into questions like: What exactly is so different or special about a more locally-owned and locally-controlled banking system? What examples reveal how a renewed local banking system can avoid mistakes of the past and present? And what policy reforms or other changes help tilt the playing field back in favor of community banks or credit unions?

“As readers of this newsletter, you may recall one of the increasingly frequent occasions I’ve taken to mention in my reporting that there were 15,000 community banks holding 37% of banking industry assets in 1985, the year I was born.  Today there are just 4,200 community banks holding 11% of banking industry assets. If we’ve had the great fortune of sharing a conversation in person or during a webinar over these past few years, I’ve probably brought it up somehow. Sometimes I worry I’m starting to sound like a broken record about it. 

“I just haven’t been able to stop thinking about this set of facts — that there were so many community banks across this country within my own lifetime, and that we allowed so many of them to get swallowed up by bigger banks. A few years back, I came across this stunning graphic from the FDIC, showing how the four largest banks as of 2011 gobbled up a bunch of smaller banks over the decades leading up to that point.

“Maybe it’s a journalist thing. Follow the money, as they say. 

“Most of us, including most bankers, think of banking as taking deposits and lending them back out to borrowers. In some ways there is some truth to that idea, but it turns out if you follow the money all the way to its original source, 92% of money comes into existence as the result of a bank making a loan. So says a recent working paper co-authored by an economist at the Federal Reserve Bank of Philadelphia. Here’s the International Monetary Fund saying the same thing in 2016, the Bank of England in 2014, members of U.S. Congress in 1964, and economist Joseph Schumpeter (posthumously) in 1954.

Local “Fountains of Money”

“So think about it this way: In 1985, there were 15,000 money-creating local institutions. They were — and still are — often deeply flawed. Nearly all of them were guilty of redlining at some point in their history if not still at the time. Remember, women couldn’t open a bank account or get a loan without a husband or male relative’s signature until 1974. But even with those flaws, each community bank functioned as a local fountain of money. 

“Is today’s consolidated banking system an effective substitute for the 11,000 community banks that no longer exist? The Paycheck Protection Program debacle powerfully demonstrated the shortcomings of today’s banking system, as big banks initially struggled to reach the smaller businesses that were most urgently in need at the start of the pandemic. 

The Ongoing Need

“I don’t intend to wax too nostalgic about the community banks we’ve lost. Taking back the banking system must not look exactly as it did before. Lately there’s been another set of facts that grows larger and larger in my mind every day: Even after decades of consolidation, there are still 4,200 community banks out there. But how many community banks are also minority depository institutions, or MDIs, meaning they are owned or led by people of one or more racial minorities and primarily serve those communities? Just 122.

“Simply put, across the entire country there are 4,078 community banks serving primarily white communities, while just 122 community banks serve primarily communities of color. Of course, it’s much more likely today than it was in decades past for white-owned community banks to do business with people of color, but recent research has revealed the continued starkness of the divide.

“Banks still tend to locate their branches in neighborhoods whose residents look like their leadership or ownership, according to a joint analysisby researchers at Johns Hopkins University and the National Bankers Association, a national trade association for MDIs.

“Any effort to take back the banking system for communities has to take it back for the country we are becoming, not the country we were.

“So how many community banks do we need? I’m not sure that me or some policymaker or expert should be the one answering that question. Maybe it should be up to each community that feels ignored or frustrated with larger, distant financial institutions to take some of that money creation power for themselves and see how they do with it.

“I’ve been reporting on recent examples of communities taking that power for themselves. My hope is for this book to help the people in those and future examples to feel connected and properly informed about what’s at stake and why efforts like these are so important to the future of our cities, this country, and the planet. Look out for it in your local bookstore (tentatively) in Fall 2024.”

Oscar Perry Abello