On Bad-News Banks


By Rebeca Romero Rainey, Chairman of ICBA

Disheartened and upset. I used those words to describe how I felt about the Wells Fargo scandal when I was recently interviewed by CNBC’s Steve Liesman. While at the Federal Reserve Bank of Kansas City’s forum for minority bankers, I told him that it was so upsetting to think that anywhere in America consumers could be taken advantage of like that.

When Liesman asked if something like this could happen at a community bank, I immediately said, “No, it would not happen at a community bank, and that’s the difference.”

I explained that at my community bank, I’m an active part of the community and that we work hard to build trust and relationships with our customers. I also know that if something like this were to happen at a community bank, that bank and its executives would be held strictly and personally accountable for overseeing a culture that allowed such abuses to happen.

It’s times like these when we need to communicate and explain just a little more.

Yet again, here amid the chaotic news cycle, we see a bright line that distinguishes the large systemically risky megabanks like Wells Fargo from the thousands of community banks across the country. It’s unfortunately events like these scandals that show everyone just how different our business models and playing fields truly are.

But community bankers have the upper hand, if we only play our full hand. We have the customer relationships, we have a time-tested business model that works, we have the sterling reputation all on our side. So let’s take those positives and counter the bad megabank news with our message—the community bank message.

ICBA is with you every step of the way. After all, distinguishing “community banks” from merely “banks” is what your national association is all about. That’s why ICBA exists, because it serves community banks and only community banks. That’s also why ICBA has created marketing and communications resources designed for community banks. ICBA’s Go Local initiative is a perfect example of educating consumers about the power of local community banks. The initiative ultimately helps consumers connect the dots between community banks and how they help their local customers and communities thrive.

Think of Go Local in terms of the farmer’s market movement. Does an apple taste better from a local farm or from one seven states away? We all know that answer, and community banking is the same. It’s much sweeter to know your banker and know where your money is going. Is it going to fund big-box businesses seven states away, or is it going to a local entrepreneur who wants to open up a business on Main Street? We all know where we stand.

I encourage you and your customers to spread the Go Local community bank message, if you aren’t already. Make “local” part of your narrative. Local matters. Community banks matter. We are different. It’s times like these when we need to communicate and explain just a little more.

Consumers are listening and they want alternatives to the bad-news banks. Let’s give them a ray of hope in the banking world. Let’s give them community banks.

Rebeca Romero Rainey is chairman and CEO of Centinel Bank of Taos, in Taos, N.M. Follow her on Twitter at @romerorainey.