Common Good Bank: Wow.
There is so much to report from my interview.
I'll write in answers to the questions from the interview.
The idea of starting the bank: He describes this in an article he wrote for a local newsletter, writing, "How did I get into this? Twenty-five years ago I grew weary of ineffectual political campaigns and lackluster leaders. It struck me that our government is so persistently bad, we might have to simply start an alternative government dedicated to the common good, and start ruling. "Hey, kids, let's start our own country!" It was a daydream, a whim, a passing fancy." Twenty years later, he worked with people in his town to create an informal alternative economic system, but found in time that is was a lot of paperwork, a bit confusing, and disconnected from the real world. So they decided to start a real savings banks.
The organizational structure: everyone who is a member can vote (there is a proxy voting system, where a member can let another member vote for them and there is also instant run-off voting); the members elect 7 board of directors --volunteers who are kind of like elders, making sure the bank follows its charter/ mission to create social good. This Board hires (and can fire) the paid 7 Board of Supervisors, who in turn hire the CEO (general manager) and assistant manager and other personell. This gives the bank the best of "both worlds" --commercial banking, which has a paid board, and credit unions, which have a voluntary board.
What kinds of questions can members vote on as a group --they can bring up questions, or vote on questions posed by the elders or supervisors; they can, if I understand correctly, vote on the kinds of investment policies the bank should have. Members will, though, be kept out of the nitty gritty --on the assumption that too many cooks in the kitchen ruins the stew.
Common Good will be FDIC --all Massachusetts banks are required.
The starting a bank description in "Banking Basics" is correct; William is currently filing the paperwork to get the bank liscense, and he is negotiating to see if the amount needed to start the bank can be 2 million rather than 8 million.
William explained to me that banks don't separate loans and investments --they are all called assets. He also said they sell bundles of mortgages. There is nothing productive about this, we agreed. It's good to remember that a socially responsible bank or economy would be productive. How do we define productive--actually producing something of value that is tangible, aside from money, or a service that produces well being in another. Interesting to see how it's complicated to define productive.
I have to re-listen to the audio recording I made, but I think that members can choose to be investors, and also there can be investors who are not members. I think there are only a small number that can be non local.
What inspired him: Mondragon, Ithaca Hours, alternative currencies, Gandhi, some of his friends.
The salary of a commerical bank CEO is at least 100,000-120,000; the CEO of a credit union is paid more like 50,000.
There are regulations for banks about what they invest in. I'm going to find this on the web.
Here is how he describes the benefits of the bank in his essay: "Based on initial survey results, our annual financial benefit to the community is projected to be as much as $120,000 by the end of the first year. This could be extra funding for education, social services, the arts, economic development, or food pantries.
Benefits to individuals will include better rates on deposits, better rates on loans, lower fees, affordable stock options with a planned return of prime minus 1.5% (currently about 5.5%), rebates from local merchants (typically 5 or 10 percent), and a local debit/credit card for purchases and cash withdrawals in every nearby town.Benefits to local businesses will include a focus on small business lending, incentives to buy local, funding for economic development, negotiable credit lines, 24/7 advertising, and local debit/credit cards with no fees and immediate deposit to the merchant's account, processed by touch-tone phone."
I'll listen to the audio and see if there is anything I can add.
I'd like to be able to diagram how this bank is different from a creditunion/ commercial bank, just as he diagrams that.
There is so much to report from my interview.
I'll write in answers to the questions from the interview.
The idea of starting the bank: He describes this in an article he wrote for a local newsletter, writing, "How did I get into this? Twenty-five years ago I grew weary of ineffectual political campaigns and lackluster leaders. It struck me that our government is so persistently bad, we might have to simply start an alternative government dedicated to the common good, and start ruling. "Hey, kids, let's start our own country!" It was a daydream, a whim, a passing fancy." Twenty years later, he worked with people in his town to create an informal alternative economic system, but found in time that is was a lot of paperwork, a bit confusing, and disconnected from the real world. So they decided to start a real savings banks.
The organizational structure: everyone who is a member can vote (there is a proxy voting system, where a member can let another member vote for them and there is also instant run-off voting); the members elect 7 board of directors --volunteers who are kind of like elders, making sure the bank follows its charter/ mission to create social good. This Board hires (and can fire) the paid 7 Board of Supervisors, who in turn hire the CEO (general manager) and assistant manager and other personell. This gives the bank the best of "both worlds" --commercial banking, which has a paid board, and credit unions, which have a voluntary board.
What kinds of questions can members vote on as a group --they can bring up questions, or vote on questions posed by the elders or supervisors; they can, if I understand correctly, vote on the kinds of investment policies the bank should have. Members will, though, be kept out of the nitty gritty --on the assumption that too many cooks in the kitchen ruins the stew.
Common Good will be FDIC --all Massachusetts banks are required.
The starting a bank description in "Banking Basics" is correct; William is currently filing the paperwork to get the bank liscense, and he is negotiating to see if the amount needed to start the bank can be 2 million rather than 8 million.
William explained to me that banks don't separate loans and investments --they are all called assets. He also said they sell bundles of mortgages. There is nothing productive about this, we agreed. It's good to remember that a socially responsible bank or economy would be productive. How do we define productive--actually producing something of value that is tangible, aside from money, or a service that produces well being in another. Interesting to see how it's complicated to define productive.
I have to re-listen to the audio recording I made, but I think that members can choose to be investors, and also there can be investors who are not members. I think there are only a small number that can be non local.
What inspired him: Mondragon, Ithaca Hours, alternative currencies, Gandhi, some of his friends.
The salary of a commerical bank CEO is at least 100,000-120,000; the CEO of a credit union is paid more like 50,000.
There are regulations for banks about what they invest in. I'm going to find this on the web.
Here is how he describes the benefits of the bank in his essay: "Based on initial survey results, our annual financial benefit to the community is projected to be as much as $120,000 by the end of the first year. This could be extra funding for education, social services, the arts, economic development, or food pantries.
Benefits to individuals will include better rates on deposits, better rates on loans, lower fees, affordable stock options with a planned return of prime minus 1.5% (currently about 5.5%), rebates from local merchants (typically 5 or 10 percent), and a local debit/credit card for purchases and cash withdrawals in every nearby town.Benefits to local businesses will include a focus on small business lending, incentives to buy local, funding for economic development, negotiable credit lines, 24/7 advertising, and local debit/credit cards with no fees and immediate deposit to the merchant's account, processed by touch-tone phone."
I'll listen to the audio and see if there is anything I can add.
I'd like to be able to diagram how this bank is different from a creditunion/ commercial bank, just as he diagrams that.
posted by oat collective at 12:11 PM
1 Comments:
For more information, see the common good bank website: commongoodbank.com (especially the video).
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