At the end of last month, the Federal Deposit Insurance Corporation (FDIC) released data showing that Arizonans have now deposited 11.5% of their money in local banks or community banks. This is a significant jump from the 3% in 2013 and 8.5% recorded in June of last year.
With just 13 banks headquartered in Arizona, the state has been called a “banking desert,” leaving eight counties without any community banking representation and small businesses with fewer borrowing options.
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“The lack of community banks in Arizona, especially in our rural communities, severely limits access to capital and borrowing opportunities for small business owners,” said Kimber Lanning, CEO of Local First Arizona. “When the pandemic struck, these entrepreneurs found themselves with very little financial support and resources during one of the most turbulent times for their business.”
According to the Small Business Administration, community banks have used nearly 60 percent of Paycheck Protection Program loans to help small businesses retain more than 3.7 million employees. Meanwhile, the big banks have only distributed 17% of their payroll protection program funding to small businesses. The FDIC report also shows an 18% drop in Arizona deposits with Chase, Wells Fargo and Bank of America, from 82% in 2015 to 64% this year. year.
Local First launched the Move your Money campaign in 2013 and has worked diligently to bring attention to the importance of local banking services while encouraging people to close their large bank accounts and transfer their deposits to a bank or bank. local credit union. “
When a deposit is made at a financial institution, that money is then loaned somewhere to generate a profit for the bank. Local community banks are licensed here and lend here, while global banks take the money from Arizona and invest much of it elsewhere in the world, ”says Lanning.
So what does this mean for Arizona small businesses and communities? James Christensen, The president and CEO of Gateway Bank, headquartered in Mesa, Arizona, sees the opportunity and transformation underway in the community. “The continuous change in the deposit set provides more opportunities for our local business owners, underbanked and unbanked neighbors,” he says. “Local banks like ours are really focused on invest in the communities we serve, which has had a positive impact on our business climate for people underserved by national institutions. “
According to the FDIC, more than 7 million Americans remain either underbanked or completely unbanked. To learn more about Arizona local banking options or how Move your money, visit localfirstaz.com.