Fine Points


Continuing America’s uniquely diversified banking system

By Camden Fine

Take heart. Be proud, even. You’re an important part of an extraordinarily successful American experiment spreading economic opportunity and freedom—that is, our uniquely diversified financial system of community banks.

Because of our relationship-based business model, no other banking system on earth is as accessible and responsive to consumers and businesses—or as dynamic and resilient—as our nation’s community banks. From across Europe and Asia and the Americas, many countries are studying how they might adapt the advantages and principles of our community banking model. Our country’s economy wouldn’t be nearly as successful without the inherent accountability that independent, locally and autonomously operated community banks provide.

History is on our side. Many economists and economic historians attribute our community banking system to the United States’ rise to a worldwide economic leader. Our country’s earliest successful entrepreneurs, inventors, manufacturers, farmers and homesteaders, as well as corporations large and small, were backed by community banks—well before the recent aberration of megabanks. The first skyscraper builders never needed a giant, systemically important, obtusely complex and interconnected megabank to finance their amazing structures.

Still today, without community banks, millions of Americans and businesses would have a very difficult time accessing the affordable credit and banking services that are most appropriate to their needs. Just the very leveling presence of community banks in the financial marketplace benefits all consumers and companies.

However, you and ICBA know that our nation’s special heritage of community banks is seriously stressed and under attack as never before. Ongoing excessive financial concentration and the crushing regulatory overkill it spawns for community banks must be reversed, and soon. Significantly reducing regulatory burdens on community banks is a top ICBA priority, as is the entwined threat of too-big-to-fail.

We’ve heard plenty of welcome talk from Washington policymakers lauding the special, vital role community banks play on Main Street America. It’s now time for effective action to address these public policy emergencies.

Fortunately, with community banks and ICBA keeping a spotlight for Congress and regulators on the importance of both delivering regulatory relief for community banks and ending too-big-to-fail, we’re making real progress. Still, that progress, in the unprecedented accommodations being provided to community banks in new banking laws and regulations, is nevertheless being undermined by the overall onslaught of regulations. ICBA’s Plan for Prosperity legislative initiative is alive and advancing on Capitol Hill, and the initiative has spawned other valuable legislation as well. But the progress we’re making to achieve regulatory relief and defeating too-big-to-fail isn’t enough. And the sad truth is that very powerful forces want our country’s community banking system simply to fade into history.

Because the United States remains the only nation with a community banking system, ICBA— the only national banking association that exclusively represents and serves community banks—will not allow community banks, the foundation of the American heritage of economic freedom and opportunity, to be neither forgotten nor taken for granted.

This is why we, community bankers and ICBA, will continue this fight. This is why we will never back down. And this is why we, ultimately, are going to succeed.

Reach Camden R. Fine at