What do people feel about this concept that is being developed by Bendigo Bank ? Is it worth it ? have you been to one ?
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Community Banks
- Thread starter crudbucket
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- Banned
- #3
So long as the banks are not named Pyramid i'm sure it won't be too bad a concept 
I've only got a vague idea, but I think the premise is that the bank is owned under franchise by the community it serves, and they get a portion of the profits, with Bendigo Bank (the only one which runs the system to my knowledge) also getting a share. The community thus not only has banking services (otherwise they may not have any) but profit directly. Of course, there's also sponsorships, employment etc etc that are also fringe benefits of having a bank in town.
I'm not sure how much control over the banks the local community has, but I'd say that they'd also be able to make decisions based more or less on the impact they would have on the community, as opposed to the bottom line. For instance, they could potentially have a policy of freezing repayments for farmers during the drought, or something, to prevent the town from going bankrupt with them.
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There was a bit of this sort of thing about after the World Wars in places like Austria and Germany. If memory serves me there was one town which went the whole hog and issued its own currency which it used to pay most of its workers wages and which could not be used outside of the town. The idea was to keep commerce in the area to build up the local economy. It worked but the government of the day eventually stopped the practice.
- Thread starter
- #6
The Community coughs up the dough for the premises, set-up costs etc and the Bank provides the infrastructure (license, products etc)
The net profits are split equally between the Community and Bendigo Bank.
The Community establishes a Company that all townspeople can buy shares in, and their share of the profit is distributed by direction of that Company. Up in Henty (NSW) they bought the local pub from their share (the only Pub in the town was about to close).
The Bank retains all decision making right regarding loan approvals etc but the Community usually make the selection of staff.
It's costly in initially, but seems to be working.
Probably more suitable to towns relatively distant from their neighbouring towns than it would be to suburbs etc though.
The net profits are split equally between the Community and Bendigo Bank.
The Community establishes a Company that all townspeople can buy shares in, and their share of the profit is distributed by direction of that Company. Up in Henty (NSW) they bought the local pub from their share (the only Pub in the town was about to close).
The Bank retains all decision making right regarding loan approvals etc but the Community usually make the selection of staff.
It's costly in initially, but seems to be working.
Probably more suitable to towns relatively distant from their neighbouring towns than it would be to suburbs etc though.
On face value they're a good thing.
As crudbucket says', the community has to flip the bill for their establishment.
I guess the thing that intrihues me is why it takes the withdrawal of a bank to spur people into this course of action.
I know of a number of small towns in the region I grew up in which used to have one or two branches of the big banks. Over time the locals began to shop and bank at the larger regional centre a half hour drive away. Their accounts were transferred to the branch at the regional centre and the ceased to use the local branch for anything other than convenience banking - withdrawals, the odd deposit.
When the big banks decided to close the local brach they were outraged. So much so, that they then put their own hard earned in to establish a community bank.
I still wonder that if they'd supported the local branch in the first place they might not have lost their original banks.
As crudbucket says', the community has to flip the bill for their establishment.
I guess the thing that intrihues me is why it takes the withdrawal of a bank to spur people into this course of action.
I know of a number of small towns in the region I grew up in which used to have one or two branches of the big banks. Over time the locals began to shop and bank at the larger regional centre a half hour drive away. Their accounts were transferred to the branch at the regional centre and the ceased to use the local branch for anything other than convenience banking - withdrawals, the odd deposit.
When the big banks decided to close the local brach they were outraged. So much so, that they then put their own hard earned in to establish a community bank.
I still wonder that if they'd supported the local branch in the first place they might not have lost their original banks.
- Thread starter
- #8
There is over 100 of them around Australia now, looks like a winner...