It’s not a secret that the large financial institutions in the US have tightened their belts over the years. In a poor economy, this is an inevitability. Credit unions and community banks spring up and become more popular when this happens, but they are not without their own challenges. The biggest issue that community banks face is the constant demand from customers, and while this is what every business dreams of having to deal with, it’s not easy to appease a growing number of customers when there isn’t the financial availability to do it.
The whole point of a community bank is that there is a personal service for customers and small businesses who are looking to shy away from the main banking models. Small businesses are the main customers for smaller community banks because they’re the institutions that say yes – especially when the business is local and can give something back. Up until recently, community banks and credit unions have had a lot of rules and regulations put upon them by the laws dictated by Congress. Community banks have been struggling under the Dodd-Frank, and while there has been a huge resilience from these community operations, requirements have been hard to attain.
Meeting regulatory requirements has not been easy, but thankfully, the Dodd-Frank bill has been proposed to be changed. There are smaller business volumes from community banks, and the Dodd-Frank requirements have been crippling for them. Mike Crapo has led the changes in the legislation, meaning that the requirements on community banks and credit unions will be relaxed. This is going to go a long way to helping these institutions to meet compliance and be able to do more for their customers. Community banks are more likely to open in rural areas than in metropolitan environments, so the changes will allow them to thrive instead of be suffocated by legislation.
Until recently, community banks haven’t been given the help that they have needed to thrive in the way that they should, and most people aren’t even aware about community banks and what they are for. It’s hard for most to understand their purpose when the big banks are where their minds go when they think of investments or loans. Community banks and credit unions have always humanised the experience of handling money and it’s taken some time for the government to recognise that help is required, which is why the change in the regulations now are coming about. Removing the burden on smaller banks is likely the best result of this bill, and it’s going to mean that smaller businesses and even individuals have an easier time when it comes to borrowing further to grow their small businesses. The idea that a small business can grow simply because community banks are getting the helping hand that they need is fantastic and it’s going to be the best way that the locals can give back to themselves.
Community banks and credit unions can work on becoming more popular again, so the customer demand can at last be met.