Ten years after the start of the Great Recession, the Cato Institute conducted an extensive survey about public opinion and the finance industry. Suffice it to say that Americans do not hold Wall Street in the highest esteem:
- 77% believe bankers would harm consumers if they thought they could make a lot of money doing so and get away with it.
- 64% think Wall Street bankers “get paid huge amounts of money” for “essentially tricking people”.
- Nearly half (49%) of Americans worry that corruption in the industry is “widespread” rather than limited to a few institutions.
At the same time, however, most Americans believe Wall Street serves an essential function in our economy. 64% believe Wall Street is “essential” because it provides the money businesses need to create jobs and develop new products. And despite their distrust of Wall Street, Americans are partial to their own banks. Ninety percent are satisfied with their personal bank; 76% believe their bank has given them good information about the rates and risks associated with their account. Eighty-seven percent are satisfied with their credit card issuer; 81% believe their credit card issuer has given them good information about the rates, fees, and risks associated with their card.
Fighting the Local Fight
One reason that people are partial to their personal banks is that many Americans do their banking at credit unions and community banks. For the unfamiliar, community banking is a form of empowerment-based economics that is focused on the entrepreneurship of individuals, generally with a goal of lifting low-income or disadvantaged groups out of poverty and providing the means for them to prosper. Many community banks remain specific to individual neighbourhoods, and are thus more able to respond to community needs. According to Michael T Pugh, the CEO of Carver Federal Savings Bank located in New York, “When you start having conversations about the flow of money, when you start having conversations about financial education, tools and resources to budget better, then you can help families build wellness and achieve their goals, whether it’s their first time buying a home or launching that small business”, he says.
Carver Federal Savings Bank is one of the largest African American and Caribbean American-managed banks in the US. The bank’s express mission is to make sure that the most talented people are getting the resources they need to get the right start, whether that be in life or business. Mr Pugh knows that “talent is not one of those things that’s selective. Everyone has certain talents. The difference is opportunity and whether things are made available for us”. Now, the bank is focusing on finding the right talent in cities across America, and eventually, across the Atlantic. “If you think about communities across the country, and certainly even at a global scale, one of the most important things that you see is that there is an ecosystem created within communities”, he says. “That ecosystem is where communities are doing business with each other. They are helping their neighbourhoods thrive by continuing to do business”. Mr Pugh is leading Carver to expand that ecosystem to include talented people that drive their communities to thrive.