Why credit unions and small businesses are beating out big banks
Community-based capitalism offers an exciting new model for American prosperity and a way out of the current economic morass. Constructive Capitalism is shareable, local, and sustainable. Examples of its impact abound.
As Republican presidential candidates campaign in states with high unemployment rates like Florida, Michigan, and soon, Ohio, it’s a fair question to ask what business is doing to us as well as for us. Rising inequality and unemployment above 8 percent have left Americans frustrated, wondering whether capitalism is capable of supplying the jobs we need along with the community concern that we want.
The answer to both is yes. A new economy is emerging, a kind of constructive capitalism that offers an exciting new model for American prosperity and a way out of the current economic morass. Constructive Capitalism is shareable, local, and sustainable. Examples abound.
Let’s start with the State Bank of North Dakota. Formed in 1919 during an earlier populist revolt by farmers across the northern plains, it’s now the destination for cringing Wall Street bankers eager to discover how it was able to earn record profits during the financial crisis as its private-sector corollaries lost billions. The answer – that the bank invests its deposits in programs designed to spur North Dakota’s economy – must come as a shocker to the Wall Street crowd accustomed to investing in what are often planet-killing projects or companies that send jobs overseas.
North Dakota may have America’s only state-owned bank, but it is far from being the only community bank to flourish despite the financial crisis. Community banks and credit unions all over the country are growing their market share and doing it in a way that benefits the communities they serve. In just the last few months, more than 650,000 people opened new credit union accounts, depositing some $60 billion.