Members of the Common Good Bank have been working to inform the public of an alternative style of banking.
PITTSFIELD, Mass. — Ask most Americans about the current banking system and they will shake their heads in disgust. That was about all they could do, until now.
The Common Good Bank, a project which began nearly three years ago, is making Berkshire County its ground zero for success. CGB founding member Robert Connors of Canann, N.Y., said the area is ripe and ready for financial change.
"It's a terrible time in our economy but it's a great time to start something like this up," he said in a phone interview. "There are definitely people in our country who are oblivious to what's happening, who are just getting by. There are a lot of social activist types here who are interested because they see it; I see it. The state can't make money fast enough. They have to deal with it quickly and locals have to deal with it on a day-to-day basis.”
The day-to-day turmoil of the economy has led, according to Connors, to a day-to-day feeling of disgust among many local residents and business owners.
"People know there's something wrong but they don't know what to do about it," he said. "Now, we can do something."
Doing something, specifically starting a bank, is worth the challenge said bank campaign manager Rick DeVoe. Since August, DeVoe, who has traveled from Tennessee, has been campaigning non-stop in order to get the ball rolling for CGB's charter bank in the Berkshires.
"What we are doing in this campaign is chartering the bank in Massachusetts," he said. "The bank will operate under federal regulations and be FDIC approved. The state requires that you have $10 million to start a bank. Typically you go for a few wealthy investors to make that happen. We're targeting about 5,000 founding members; bringing people not based on what they can afford to invest but on their belief in what we're doing."
The concept of a bank for the "common good" was roughly draw in an article by William Spademan of Ashfield, now president of the sponsoring organization Common Good Finance. The founding group has been holding informational meetings in the neighboring counties the past couple years.
DeVoe said the greatest challenge of getting CGB off the ground is explaining its mission and logistics to potential founding members.
"We want them to understand monetary politics," he said. "That's too much to take in in one sitting. That's why we've planned our informational meetings to happen in three stages; real democracy, real money and real power."
Connors, who himself has been through the informational meetings, said that while the devil's in the details, the big picture is not difficult to comprehend.
"It's hard to explain concepts of mutual credits," he said. "People are motivated by the concept that there will be a truer democracy and true economic power in this. We can support local businesses based on what the members choose. We are acting within our existing laws to do this."
The bank's website describes it as having the "spirit of a credit union with the power and growth potential of a stock savings bank."
According to DeVoe, the CGB works like a traditional bank in that every account holder has stock in it. The key difference he said is where the profit goes after the dividends are handed out.
"We agree amongst ourselves where the dividends go into the community," he said. "We collectively will decide what lending priority there is for the bank; whatever is in the best interests of the community. For instance, we may not opt to do car loans because there are already several agencies for that, but we might decide that giving a loan to retrofit a home is a good thing."
DeVoe said he hopes to have the charter bank up and running by Thanksgiving of next year.
"The money is going to come, the idea is already resonating with people," he said. "It's really about when we open our doors that we are going to know what we are doing and continue doing it."
There will be an informational meeting on the Common Good Bank on Saturday, Dec. 18, at 3 p.m., at St. Stephen’s Episcopal Church on 67 East St. For more information, call 518-781-4686 or visit www.commongoodbank.com.
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Accurate reporting, especially in reporting the key issues involved.
FYI:St Stephens Church is located in Pittsfield Ma for those planning to attend Saturday December 18 meeting.
BTW, I live in Canaan, NY vs. the reported Hillsdale, NY, much to the delight of Hillsdale I'm sure. LOL
Editor: Residence corrected. Some people may not realize but the dateline, or location at the beginning of the story, stands for the address of all elements within unless otherwise noted.
I feel I have to speak up for the local banks (at least those in North Berkshire). (And no, I don't work for any of them.) The banks, commercial or credit unions, have been great supporters of our community and deserve none of the wrath that the Wall Street financial institutions are due. Local banks donate to community groups, the hospital, and many other organizations. Their responsible lending practices have helped this area avoid the housing crisis apparent across the rest of the country. Common Good may be a great idea, but don't slam your local banks.
I suppose all things are relative, but the local community banks absolutely played a role in the housing crisis. They were giving zero-percent down loans at levels substantially above assessed values to people that couldn't afford the homes.
They may not have been smart enough to even know what a CDO or a Tier 3 level asset was, but they were guilty of letting greed allow them to make mistakes.
(ex. Berkshire Bank & Edith Wharton, and about 200 foreclosures in the last 2 years)
While I agree that the local banks are playing a positive role in community organizations, it has been my personal experience that these same banks are VERY unwilling to work with many residents who are facing foreclosure and yet several of them have received bailout funds.
As a retired bank exec, I laud the effort but must say that these types of banks already exist. They are called Cooperatives and Credit Unions. They do just fine by the Berkshires. Start this up somewhere else please.