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As a former Secretary of State for the state of Alabama, I have seen firsthand how the strength of our local economies can help our hometowns become more vibrant and resilient for those who live there. The driving force behind our local economies are the small businesses that cater to our neighbors by providing the goods, services, and well-paying jobs they depend on. To do so, these businesses often choose to partner with our local community banks because they understand the unique financial needs of their customers. It is crucial now more than ever that we recognize the significant role these banks play and ensure they can continue to support our hard-working neighbors.
Community banks are more than your typical financial institution; they are trusted mainstays of the areas they serve. In many of our smaller cities and towns, these banks provide not only financial services but also contribute to local development and economic stability. They finance our small businesses, help families save for and buy a home, and support community projects that are often overlooked by global competitors. Further, our community banks have a deep understanding of local markets that enables them to make lending decisions that are sensitive to the needs of their communities – something that is not easily replicated by larger institutions.
From February 15, 2011, to January 16, 2015, I had the privilege of working for a community bank. During this time, I gained a deeper understanding and appreciation for the services that community banks provide, particularly how they can simplify decision-making processes for loans such as personal loans, auto loans, and small business loans.
I also recognized the importance of meeting customers’ needs through personal attention. I often visited customers at their homes to open new accounts and assist with transferring resources. Throughout my experience, I realized that it is the community banks who purchase advertisements and sponsor local events, such as beauty pageants. They are the individuals you contact for yearbook ads, football program advertisements, basketball scoreboard signage, and banners for baseball and softball teams.
It is these personal relationships and the hometown people of community banks that distinguish them from larger institutions.
However, the ability of community banks to continue playing this supportive role heavily depends on their financial health, which is tied to their ability to secure the necessary funding to provide their tailored services. Today, community banks face the challenge of remaining competitive in an industry dominated by larger players with deeper pockets and broader reach. To stay relevant, they must evolve as needed, which requires access to funds not just from local deposits but also through innovative financial instruments and partnerships.
In recent years, the proliferation of financial technology has opened new avenues for this funding but accessing it requires support from both regulatory frameworks and legislative action. It is imperative that the new Trump administration and Republican majority in Congress – including our very own Sen. Katie Britt – understand and act on this necessity. By promoting policies that enhance the funding mechanisms available to community banks, we can ensure that these institutions continue to provide the most advanced services that still fit the needs of their local clientele.
As we move forward under new leadership in Washington, it is critical that our leaders commit to prioritizing community banks through practical and effective policy measures. This commitment should aim to remove barriers to diverse funding sources and encourage innovations that allow these banks to best assist their customers and compete on a larger stage without sacrificing their local focus. Supporting community banks is not just about financial policy; it is about strengthening trusted resources that sustain the economic welfare of the places we call home – whether that be here in Alabama or in communities across the country.
