What's Going On?

What's Going On?

 

“What’s Going On?” is a new feature for the Miners Bank web site. It is opinion oriented and will raise questions related to the banking industry and our customer base. We invite your feedback and comments.

 

George Groves

President & CEO

The Miners Bank 

 

 

Go Back

American Community Banking

I just returned from a short vacation in a European country.  Typically European, in which the federal government plays an oversized role in the lives of the citizens of that country.

I spent some time observing the banking industry (busman’s  holiday?).

There are far fewer banks.  There is less competition.  The banks are very security conscious.  The banks are even more regulated than in the US. Marketing of bank products and services is usually limited to in-branch display (and since the banks are so security conscious, there are not many customers in the lobby).  The customer experience in that country was very different from that offered in the US.

Let’s take a brief look at the American banking industry.  There are currently 7,513 insured banks.  Of these, 6,846 or 91% are banks with an asset size of less than $250 million and can be considered community banks.  Yet, the 9% larger banks have about 90% of the total assets in the industry.  The industry is consolidating at a fairly rapid pace. Using the $100 million banks as an example, in 1990 those banks composed 70% (in number) of all banks; in 2000 they were 55% and 34% in 2010.  During this same time frame, the total of insured institutions has dropped from about 15,000 to the previously mentioned 7,513.  We are losing the community banking segment of the industry.

What’s causing this consolidation?  The single most important factor is the change in the business model emanating from new regulatory requirements and laws.  The smaller the institution the larger the proportionate cost.  There are many sides to the larger argument of regulation equals consumer protection.  But, I would argue that if consumers are charged a higher cost or with less choice, the price of regulation has exceeded the benefit.

The point of all this is that we are becoming Europe in which the industry is dominated by the giants. Community banking—in which you know the bankers and the directors-- is dying out.  Pushed out by a regulatory zeal that has yet to prove its benefit.

Do you want America to become Europe?  While it may be fun to bash the banking industry, there are real consequences in reaction to regulation.

That’s what’s going on!

Comments  2

  • Contributor 27 Oct

    They are destroying the system as we know it. They want to nationalize the entire country. It is a push to socialize the country. We must stand up and fight it. Small business is getting pushed out also using the banking industry to do the dirty work. I have a great pay history with banks and now that I need them my local bank was taken over by one of these centralized banking units. I can't even get them to respond to a phone call or an email. I have not borrowed money from this bank in five years. I have my building loan with this bank and don't know if they are going to renew it. I have payed them 692 thousand dollars since 2008 on my building 1.5 million since 2001. I could use a small credit line 150,000 and just keep paying my building loan can't get a response from this bank. I have been in business 33 years and have never seen it like it is now. The Government is tearing this country apart. They are punishing those that are doing the right thing and rewarding those that are not.
  • Terry 01 Nov

    Dear Contributor #1,

    Just like ANY consumer, you have the FREEDOM to find another bank.  MINERS BANK is and arm of a larger bank and aren't ashamed to charge the little guy like me $10/month for the privilege of having a checking account with them.  I am disabled and not able to keep a $300 balance at all times with MINERS BANK, therefore I am a nuisance and cost them money, even though they charge $40 for each NSF transaction that hits my account.

    Poor MINERS BANK has such a hard time in today's economy that they MUST pay the largest transactions first and then bounce the small $10 & $20 transactions so they get even more revenue.  I feel so sorry for my bank that in one month they earned over $160 in NSF fee's from me and then the poor guys had to charge me another $10 service charge just to stay afloat.

    So "Contributor #1", please don't be so hard on the poor banking industry, they're having a tough time too.  I just hope they put my name on one of the bricks they're using to build their new building in Frackville.

    I eagerly await the response from management of MINERS BANK but I hope they do it on-line because I heard the next thing they're charging for are envelopes.

    Sarcastically,

    Terry

    ======================================
    Terry
    Thank you for your comments. I’d like to respond to several of those statements. Miners Bank “is and arm of a larger bank”. That is not correct. Miners Bank is a locally owned community bank serving Minersville and Schuylkill Co. We are not part of a larger organization. We are no different than any local business. We commit to treating our customers fairly and expect the same from them. We are owned by local investors and are a member of the Federal Deposit Insurance Corporation (FDIC). We carefully manage the risks that we incur and do so to protect the customers that we serve. The methodology we use to pay larger transactions first is a risk management process to eliminate the larger risks first. If it would be helpful to meet with one of our staff to learn how to better manage your account, please let us know.

        George Groves
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