Independent’s Day is a weekly opinion column by published on Wednesdays. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
(Updated at 3:50 p.m.) The “Dodo bird” has become an international symbol for all that was but never will be again. It left us sometime in the 17th century and if we are not careful, small banks may leave us early in the 21st century.
Today, the Washington Business Journal reported that Arlington-based Virginia Commerce Bank (VCB) is beingn sold to Charleston, W.Va.-based United Bankshares. At about $3 billion in assets, VCB is tiny. Compared to the largest banks – like JP Morgan Chase & Co. with over $2 trillion in assets — it is infinitesimal. So why does it matter? It matters because the small banks have done the majority of the business lending in our communities for a very long time. As banks consolidate, some of that power of personal, relationship lending disappears.
Just recently First Virginia Community Bank acquired Arlington’s First Commonwealth Bank of Virginia. Small local banks like John Marshall Bank, headquartered in Falls Church, and Burke & Herbert, based in Alexandria, need to be preserved somehow. We need to preserve them because what’s bad for small banks is bad for small business, and what’s bad for small business is bad for our local economy.
Last year I had an opportunity to talk with one of the GM’s of our many pizzerias in the Clarendon/Courthouse corridor. He shared with me how helpful it’s been to have a relationship with John Marshall Bank, and we know he’s fed thousands of our neighbors with that help (including me)!
Private merchant banks helped build the family farm and gave birth to the industrial revolution of the 19th century. Local bank relationships financed the business-startups-turned-Fortune-500s of the 20th century. We celebrate the “relationship bank” every year with the holiday classic, “It’s a Wonderful Life.” Do we root for Mr. Potter or George Bailey and the neighbors of Bedford Falls? Few of us live in small towns but many of us still have relationships with small banks. They finance our education, new businesses, cars and homes. Credit unions are great examples of relationship banks.
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act was passed to stop big banks from doing bad things — like failing. Unfortunately, what it’s been better at is stopping small banks from doing good things — like lending.
New Indian Eatery Coming to R-B Corridor? — The Fairfax-based Indian restaurant Curry Mantra is scouting out real estate along the Rosslyn-Ballston corridor in hopes of opening two new “Curry Mantra Express” carryout restaurants by the end of the year. [Northern Virginia Magazine]
Shuttleworth Recruits Republicans — Bruce Shuttleworth, the Arlington businessman who’s challenging long-time incumbent Rep. Jim Moran for the Democratic nomination for Congress, is recruiting Republicans to vote for him in the June 12 primary. The Democratic blog Blue Virginia posted video of Shuttleworth asking for the vote of members of the Falls Church Republican Committee. [Blue Virginia]
GOP Looks for County Board Candidate — Arlington County Republicans are still trying to recruit a candidate to challenge Democrat Libby Garvey in November’s County Board election. Mark Kelly, who lost to Garvey in the recent County Board special election, says he doesn’t plan to run again this year. June 12 is the filing deadline to get on the November ballot. [Sun Gazette]
Local Bank Makes ‘Most Trustworthy’ List — Virginia Commerce Bancorp, the locally-based parent company of Virginia Commerce Bank, was named to the Forbes magazine list of “America’s 100 Most Trustworthy Companies.” [BusinessWire]
Flickr pool photo by Philliefan99
(Updated at 12:05 p.m.) The phrase “bank fees” used to describe a commonly-accepted practice. But in the past few months, rising fees have stoked consumer frustration. As a result, fed up customers have been abandoning big banks, and credit unions — including those located in Arlington — are reaping the rewards.
During the past year, and particularly the past two months, local credit unions have experienced rapid growth. Navy Federal Credit Union, for instance, experienced a 38 percent year-over-year jump in new members in October. Navy Federal has experienced a 23 percent increase in new customers in 2011, compared to its typical annual growth of 7 percent.
The 17,000 member Arlington Community Federal Credit Union, meanwhile, saw a 34 percent increase in new customers from September to October, in addition to a 100 percent increase in new online checking accounts during the same period.
(Disclosure: Arlington Community Federal Credit Union is an ARLnow.com advertiser.)
Although some banks have since rescinded new debit card fees and other banking charges, a grassroots movement toward credit unions and away from big banks seems to be taking hold. It even prompted the creation of Bank Transfer Day, which encouraged people to move their money to credit unions on November 5.
“People are expressing frustration over being treated like a number and not a member,” said Patty Briotta, public relations manager for the Clarendon-based National Association of Federal Credit Unions (NAFCU). “When some banks recalled their debit fees, it was too little, too late.”
Arlington Community Federal Credit Union CEO Brenda Turner said that in addition to accruing new applications, there has been an increase in customers who already held an account suddenly wanting to add another one.
“We could tell they were angry with the big banks because they wanted to move everything,” Turner said. “A lot of times people come in and just want an auto loan because we have great rates. But they wanted to completely clear out of the big banks and come over.”
Previously, many new members were attracted to credit unions due to features like competitive interest rates. Now, those who answered a NAFCU survey listed fees (24 percent) and general dissatisfaction (51 percent) as reasons for making the switch.
“During this challenging financial time, people want to leverage all of their resources and opportunities,” Briotta said. “You’re the boss at a credit union because it’s member-owned and a not-for-profit financial institution.”
Navy Federal Credit Union spokesperson Donovan Fox agreed, adding: “All of our members have a vote and everything that we do is for the benefit of our members. We’re always trying to increase our services, making them better for our members.”
NAFCU has recently ramped up promotion of CUlookup.com, a website it created to help consumers locate local credit unions. The site, which also lists the membership criteria of individual credit unions, has experienced explosive growth. This October saw a 700% year-over-year increase in web traffic this year, according to Briotta.
Although the rush will likely level off, right now Arlington’s credit unions are reveling in the business boom.
“It’s a great deal,” Turner said. “It’s unfortunate that it hasn’t been as widely known the convenience that credit unions offer.”
Said Briotta: “This is an example of Main Street winning over Wall Street.”