One of the greatest pleasures of the Christmas season is to watch the classic Christmas movies of yesteryear that portray fictional examples of an American culture that embraced community spirit and human kindness. White Christmas, Miracle on 34th Street and It’s a Wonderful Life all depict tales of American citizen’s concerned with the simplicity and goodness of life.
In “It’s a Wonderful Life,” George Bailey, played by Jimmy Stewart, is a hometown boy from Bedford Fall’s who gives up his dreams of travel and big pay check to carry on his father’s local banking business, the Bailey Building and Loan Association, vital to the well-being of the townspeople. George feels a tremendous responsibility to help his community and one of the ways to accomplish that was to supply the funds to help build Bailey Park, an affordable housing project. Meanwhile, George’s greedy slumlord and Board member, Henry Potter, aggressively tries to shut down the bank in order to take control of the town for the sake of his own wealth, power and personal advancement. Through a series of unfortunate circumstances, George is faced with financial ruin and the faulty accusation of bank fraud. George becomes suicidal, but is saved by his guardian angel who demonstrates to George all the good he has done for the people of Bedford Falls and how all his beneficial acts affected their lives in a positive way. George joyously runs home to where the authorities are waiting to arrest him, but where he is instead met by a flood of townspeople who bring enough donations to save George and the Building and Loan. George is toasted as “the richest man in town” and realizes that he truly has a wonderful life.
The George Bailey story is one of a man who worked hard to get ahead, not at the expense of others misfortune, but instead by performing charitable deeds that would help enrich his neighbor’s lives. There were no blanket monetary giveaways meant to buy the townspeople’s admiration and respect. George treated the community like family, knowing firsthand that one’s dignity and self-worth are the keys to a wonderful life. The story is one that played out time and time again in America, when leaders were born and brought up in small town, rural America, leaders who worked alongside their neighbors, felt their pain, watched their children grow, buried their soldiers, had tears in their eyes at the Fourth of July parade. These simple human stories of compassion and integrity were what made America great.
A recent article “Rural Banks Know Something Big Banks Don’t” written by Brendan Greeley for Bloomberg Businessweek, reveals that community banks thrive in an otherwise depressed, over regulated banking environment. Commonsense business plans prevail at these community banks who use $1 billion in assets as a cutoff for their definition of being a community bank. In rural counties, community banks still hold 70 percent of deposits and do a better job at what banks were initially set up to do, underwrite home mortgages and loans to farms and small businesses. According to the FDIC, in every five-year period since 1991, a lower percentage of loans from community banks has gone bad. Richard Brown, the FDIC’s chief economist says small banks have a competitive advantage with “nonquantitative” information (think George Bailey) of their customers and local economy.
Ken Hale is chief executive officer and 40 percent owner of the Bank of Montgomery, chartered in 1903 in Great Parish, La, by a group of men that included his great-grandfather and Hale had been quoted as saying, “there is no price worth me selling the bank,” “I would live with the guilt for the rest of my life.” Like most community banks, Bank of Montgomery, with $190 million in assets, came through the financial crisis unscathed. Hale points to what economists call social capital where small, tight-knit communities provide controls on banks. “You can’t be greedy,” Hale says. “You can’t be devious. Because I gotta go home everyday and see my two neighbors.” Both have mortgages with his bank; all three families attend the same Catholic church and school. “If I take advantage of them with some subprime loan, I gotta sit next to them,” he says. Two of his banks branches are in towns with fewer than 500 people. Treat a customer poorly, he says, “and there aren’t a lot more people to choose from.”
Hales’s banking story is in stark contrast to what started the egregious domino affect of America’s current financial meltdown: Fannie Mae and Freddie Mac. Loans to minorities and borrowers with weak credit histories was relentless, while Congress neglectfully added to the delinquency by passing the Community Reinvestment Act, empowering regulators to punish banks that failed to “meet the credit needs of low-income, minority and distressed neighborhoods.” Lenders responded by loosening their underwriting standards and making shoddy loans. In 2003, Barney Frank was the ranking Democrat on the House Financial Services Committee, which oversees the entire financial services industry, including the securities, insurance, banking and housing authorities, and his porky fingers were all over the financial fiasco. When the Bush administration warned of “systematic risk for our financial system” unless the mortgage giants were curbed, Barney Frank complained that the Bush team was more concerned about financial safety than about housing. Frank went on to say, “I do not want the same kind of focus on safety and soundness (in the regulation of Fannie and Freddie) that we have in the Office of the Comptroller of the Currency and the Office of Thrift Supervision. I want to roll the dice a little bit more in this situation toward subsidized housing.”
Frank, blessed with an education from Harvard, a school that seems to offer lessons in gambling rather than in common sense and good moral judgement, was a recipient of more than $40,000 in campaign donations from Fannie and was once romantically involved with Herb Moses, Fannie Mae’s assistant director for product initiatives, who, while earning a six-figure salary, helped develop many of Fannie Mae’s affordable housing lending programs. The lack of media attention and Congressional oversight to Frank’s bedding down with Herb and its inherent conflict of interest is both deplorable and disgraceful. This show of political correctness, so as not to appear to be homophobic because Frank is gay, is the quintessential double standard. Meanwhile, Frank’s porky finger will forever be known as pointing into the polluted political atmosphere while saying, “the private sector got us into this mess.”
America, now more than ever, needs unselfish, morally responsible leaders willing to set aside their own personal advancement, for the good of the people; folks from Main Street America who were brought up to know and help their neighbors, who understand that a small town business model and ethic, rather than a behemoth government catchall of onerous regulations, is the only way our nation will begin to heal, get healthy, and stay healthy. May the George Bailey’s among us win the 2014 elections, Americans who truly know what a wonderful life is all about.