WASHINGTON, D.C.— Phillip Basil, Director of Economic Growth and Financial Stability for Better Markets, and Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with Better Markets’ new report, “Strengthening Community Banks Creates an Economy That Works for All Americans”: 

“Community banks play a critical role in supporting our local economies. Their success is tied directly to the well-being of the communities they serve, which makes them uniquely positioned to drive broad-based economic growth that benefits hardworking Americans. Community banks: 

• Channel a higher share of deposits into loans for small businesses, households, and farms when compared to large banks. 

• Use local knowledge to lend where traditional credit models fall short and provide credit to applicants that would not otherwise qualify.  

• Maintain more local lending than large banks through economic cycles and at lower loss rates, supporting communities during downturns. 

“Despite the tremendous amount they contribute to communities across America, community banks face an unlevel playing field. Existing policies benefit the largest banks and fail to appropriately support the critical mission of community banks, leaving them struggling to keep up and stagnating their growth. To remedy this, we suggest: 

• Expanding deposit insurance for community banks, ideally through reciprocal deposits. 

• Providing capital relief to community banks that invest profits into improving their business and risk management.  

• Promoting the formation of consortia among community banks to share operational and other resources that are hard to find or to afford individually.  

• Providing centralized services that allow for shared information and best practices. 

• Streamlining supervisory reviews of certain technological services provided by common third parties. 

“The policy changes outlined in this report are just the beginning but would go a long way in resetting the policy landscape.” 

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.