Small knows small:
A community bank comeback strategy

   A FACT-SHEET STUDY by the Small Business Administration suggests an up-from-here strategy for community banks — what you might call a “small on small” strategy.

   Small businesses, the SBA notes, generate most of the new jobs in the U.S. economy — critical engines of growth. Yet they’re often strapped for capital.

Small banks, on the other hand, are, well, small — and local. They also provide much higher rates of borrower satisfaction on loans compared to other lenders, as the table above shows.

The obvious answer for both parties is to marry supply with demand.

For 20 years, the decline of community banks has made this arrangement ever more tenuous. But with the passage of the Crapo Act, followed by a year of generally intelligent regulatory re-write by Randal Quarles at the Fed, the ” supply” side of this equation may be improving.

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