Customers pay the retailers using reliable, convenient payment tools that banks developed to help speed commerce while also protecting funds. And tools like direct deposit, online bill pay and mobile banking help the retailers’ employees manage their finances and save for their own homes.
This economic microcosm – featuring banks of all sizes – exists in communities across America. Multiply it 100,000 times or more and the result is a $16 trillion economy that is the envy of the world.
Thanks to community banks, which typically spearhead development efforts in their towns and make 46 percent of small loans to businesses and farms, Main Streets across the country are surviving and thriving.
Regional banks project the benefits of community banking onto a larger screen. Their scale allows them to make bigger loans and help local businesses expand into new communities. They also account for 675,000 jobs, $4 trillion in deposits and 43 percent of loans to individuals.
The country’s largest banks, which themselves employ more than 1.2 million Americans, do all of the above while filling a unique niche. Their credit capacity and array of financial services support the operations of America’s globally active businesses, which in turn employ 20 percent of U.S. workers. Large banks also created and operate the modern payments system, which keeps commerce turning. Along with community and regional banks, they also provide critical financing for state and local governments.
Banks of all sizes play a critical role in maintaining and growing the country’s economy, and this banking diversity should be supported by policy, not undermined by it. That’s worth remembering next time someone contemplates imposing crushing new compliance burdens on community banks, regulating regional banks as if they were global, or dismantling the nation’s largest banks.
Keating is president and CEO of the American Bankers Association.