BankLocal: Where You Bank Matters

I’ve been a volunteer and board member for a local-first non-profit for several years now. I’m kind of a hippie do-gooder like that, you know? Most recently I’ve been involved in our community capital / entrepreneurship programs, which is kind of a spiritual cousin to the work I was doing with Wefunder and the JOBS Act, but at a much smaller community scale. Access to capital and economic support from your neighbors is a critical ingredient to creating the awesome spaces, inventions, and events that make cities and towns of any size worth living in.

Crowdfunding is a great way to get new businesses off the ground, but bank loans are obviously a big part of it too, and that won’t be changing any time soon. What a lot of people don’t think about is that your choice of bank can really matter. Many local firsts run local banking initiatives to encourage people to move their money from large megabanks to locally owned banks and credit unions. There are a number of reasons this is meaningful but what it really boils down to is when you deposit money with one of these banks, typically a much larger percentage of your dollars is reinvested back into the local economy in the form of small business loans, employee wages, and vendor purchases from other locally owned businesses. Because bank executives tend to be local themselves, they tend to care more about the needs of the local economy.

This information is all publicly available, thanks to data.gov, and call reports published by the FDIC, FFIEC, and NCUA, but it’s not exactly easily digestable. We struggled to find any sort of bank report summaries we could point people at, much less ones that were localized to our area. There are a few tools like ICBA’s community bank locator, but what we really wanted was something that’d take a bunch of factors into consideration (are they headquartered locally? what percentage of their loan portfolio is small business lending? do they engage in speculative trading?) and give us a sort of local impact score.

So about six months ago my friend Bob Marino (a fellow board member and financial analyst) and I decided to put together a little side project to make it easier for people to find this sort of information. If you care about this sort of stuff — and you should — check out our BankLocal project. Take a look at data for your current bank and see how it stacks up against other institutions in your area. We’d love to hear what you think.


Originally published at blog.zerosum.org on March 15, 2015.

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