

Show HN: BankLocal – Find local banks and invest in growing your community - zapnap
http://banklocal.info

======
bobmarino
Hi,

putting aside the debate over free market theory for the moment, as regards
the banking industry the evidence is very clear and compelling: smaller sized
banks and credit unions do in fact lend a greater portion of their assets to
small businesses. This mainly has to do with the business structure of large
vs. small banking institutions. To quote the FDIC's 2012 Community Banking
Study:

"Community banks tend to be relationship lenders, characterized by local
ownership, local control, and local decision making. By carrying out the
traditional banking functions of lending and deposit gathering on a local
scale, community banks foster economic growth and help to ensure that the
financial resources of the local community are put to work on its behalf.
Community banks have always been inextricably connected to entrepreneurship.
As of 2011, they held 14 percent of banking industry assets, but 46 percent of
the industry’s small loans to farms and businesses."

Analysis of our own data is even more telling: BankLocal data as of 12/31/13
shows that the nation’s four largest banks, JP Morgan Chase, Bank of America,
Citibank and Wells Fargo (collectively known as the Big-Four) only loaned 1.9%
of their combined assets to small businesses compared to 10.6% for small and
medium size banks.

If small businesses and the Main St. economy matter to you, then so should
Local Banking.

~~~
swatow
> _putting aside the debate over free market theory for the moment..._

But this is the central point, whether a person is interested in investing
locally, or investing in small businesses. I already addressed the issue of
investing locally in my top level comment.

> _If small businesses and the Main St. economy matter to you, then so should
> Local Banking._

Free market theory says that there is no reason to prefer small vs large
businesses. Which ever is most efficient will win in the market place, and
will produce the most total welfare. And if income distribution is a concern,
taxation and redistribution is a better way to address this than funding small
businesses.

The term _Main St. economy_ is misleading, because both small and large
businesses contribute to the economy in exactly the same way. There is no way
in which big businesses don't affect or benefit ordinary people.

~~~
mgkimsal
"Which ever is most efficient"

If I care about the most efficient way to make sure money stays local to my
region, dealing with institutions that have a habit of keeping money in a
particular region seems the best way to ensure that happens.

~~~
righttoremember
Efficient is a technical term from economics. It refers to whatever maximizes
total welfare. Total welfare is also a technical term, and is roughly
approximated by GDP.

You don't have to believe efficiency is an important goal (although my post
was arguing that it is). But please let us have this word. Arguments should be
had on the basis of refuting peoples ideas, not depriving them of the use of
any word with a positive connotation.

------
swatow
While I guess it's good to provide people with information that they want, I
disagree with the premise that _Local banks and credit unions work within
established localities and reinvest depositors ' money into local businesses,
farms, and individuals. To put it simply, they often use your money more
responsibly than large megabanks, and your community benefits._

Every business is located somewhere. Why would it be better for a person to
invest in projects located near themselves, than far away? From the way they
phrase it, you'd think that megabanks [sic] throw the money into a black hole,
or otherwise use it in some manner other than investing in businesses (which
again, must be located somewhere).

The movement to buy/invest locally goes against all of economic theory.
Artificial barriers to trade (such as a choice to buy locally) reduce total
welfare, and can rarely be justified in terms of income distribution (because
the best tradeoff between total welfare and income distribution comes from
taxation and redistribution).

~~~
ryanhuff
If the product costs/benefits are equal, why not buy local? Was there an
assumption that buying local is a less attractive deal?

~~~
swatow
If the product costs/benefits are equal, why not buy non-local? It seems like
your avoiding discussing the actual reason I gave for why local vs non-local
is not a valid criterion for judging potential investment opportunities.

In general, if you think that some property of a product is good, then you are
implying that you should buy it even when it would otherwise be a less
attractive deal. In the language of economics, you would say that property
enters your utility/decision function.

------
zapnap
Hi, one of the developers here. This is just a little side project I built
with a financial analyst friend. Uses government data from the FDIC / FFIEC /
NCUA and an open algorithm Bob developed to rank banks based on local impact.
Clearly more we could do here but wanted to release an easy to use tool that
could help people find and promote community banks. Response has been good so
far, just won a social innovation challenge grant. Your feedback and thoughts
(improvements, issues, etc) all very welcome. tia.

~~~
_neil
Seems like a cool idea. Nothing comes up when I search cities in VA. And when
I went directly to their pages I got a rails error:

[http://banklocal.info/locations/va/3174-virginia-beach-
va](http://banklocal.info/locations/va/3174-virginia-beach-va)
[http://banklocal.info/locations/va/827-richmond-
va](http://banklocal.info/locations/va/827-richmond-va)

~~~
zapnap
Ha! My Redis instance just fell over :) Things should be back to normal now.
Apologies for the inconvenience.

Seems like if you just search for 'Virginia' Google Places will plop you down
in a rural part of the states where there aren't any banks within the default
5 mile radius. If you expand that search area a bit (or select a city) you'll
see more options.

Thanks for taking a look!

