3c hapter - Index of

72 Locavesting
And you don’t have to give anything up: Credit unions and
community banks generally provide a full range of competitive
fi nancial products, from checking and savings accounts to credit
cards, mortgages, auto loans, and CDs.
The campaign seems to be striking a chord. In a Zogby
Interactive poll conducted in February 2010, nearly one- third of
respondents (32 percent) said they had considered moving some
or all of their banking from a large national bank to a community
bank or credit union. Fourteen percent had actually done so in
the past year—the bulk of them (9 percent) as an act of protest.
And the nation’s nearly 8,000 credit unions added 1.2 million
members in 2009, for a total of 92 million members.
Perhaps that’s why the big banks are now eager to cast themselves
as local. Wells Fargo and HSBC are billing themselves as,
respectively, “the nation’s leading community bank” and “the
world’s local bank.” Never mind that they are more than 1,000
times the size of the largest community banks. 16
A Threatened Model
For all of their appeal, our true hometown banks may be an endangered
species. Community banks, for the most part, did not participate
in the shoddy lending, speculative bets, and off- the- books
shenanigans of their Wall Street brethren. Nonetheless, they were
hit particularly hard by the recession, in part because they held so
many small business and commercial real estate loans. The FDIC
shuttered 157 banks in 2010, most of them small and clearly not
too big to fail. That’s the highest number of failures since the
savings- and- loan crisis in 1992, and up from 140 bank failures in
2009. 17 The FDIC has another 860 “problem banks” on its watch
list. Credit unions have fared better: Just 28 credit unions were
shuttered out of a total 7,965 at the start of the year. 18 (For this
reason, it is wise to check the health of a community bank or
credit union before you open an account—there is a handy tool
for doing so on the Move Your Money site.)
Many small banks are struggling to raise capital—the underlying
equity that is distinct from depository funds—to meet stricter