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Recently, news outlets from the Wall Street Journal to National Public Radio have predicted the death of free checking. The reason: banks, believing regulatory changes will cut into revenues, are starting to charge fees on even basic checking accounts. Some Banks even hint that charging you more in fees is critical to their survival.
Free checking may be dead at some banks, but at Pinnacle Bank, Totally Free Checking is alive and well.
Pinnacle Bank is a community bank and one of the best capitalized banks in the market. We didn’t take bail out money, and we don’t answer to a far-off board of directors. Our values are the same as your values. Our model is to provide valuable advice, quality services, and the security you deserve. Yes, we are in business to succeed, but we know success is meaningless if our customers do not also prosper.
That’s why free checking is good for both of us. You get a service that should be free and we get the chance to build a relationship with your family. While nothing is ever certain, we know Totally Free Checking is a good deal now and believe it will be in the future.
So in the end, do you want security or great value? At Pinnacle Bank we think the answer is simply….YES. If you agree please tell your friends, family, and everyone you know about Pinnacle Bank’s Totally Free Checking!
Sincerely,
David G. Barnett
President & CEO, Pinnacle Bank
P.S. Is someone you know unhappy with their bank? Tell a friend about Pinnacle Bank’s Totally Free Checking and you’ll both get a free gift!
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Bernanke is more optimistic than we are. The following is a synopsis of his speech. Through the lens of FTN’s economic expectations, it amounts to a promise of full-blown quantitative easing. That is, the Fed is likely to expand its purchase program and begin adding to its balance sheet again.
Looking back at the year since the last Jackson Hole conference, Ben Bernanke says, “growth during the past year has been too slow and joblessness remains too high. Financial conditions are generally much improved, but bank credit remains tight; moreover, much of the work of implementing financial reform lies ahead of us. Managing fiscal deficits and debt is a daunting challenge for many countries, and imbalances in global trade and current accounts remain a persistent problem.” This is the starting point from which policy makers must think about the work yet to be done.
Turning to the current state of the economy, Bernanke said:
Looking ahead: “Despite the weaker data seen recently, the preconditions for a pickup in growth in 2011 appear to remain in place.”
“Although output growth should be stronger next year, resource slack and unemployment seem likely to decline only slowly. The prospect of high unemployment for a long period of time remains a central concern of policy. Not only does high unemployment, particularly long-term unemployment, impose heavy costs on the unemployed and their families and on society, but it also poses risks to the sustainability of the recovery itself through its effects on households’ incomes and confidence.”
Well said. The Fed is charged with stabilizing prices AND promoting full employment for a reason. Bernanke is saying that the unemployment rate, not the inflation rate, will be the Fed’s primary focus in the year ahead. But, Bernanke went on to say the Fed will not ignore inflation risks. Right now, however, inflation is lower than the FOMC considers healthy.
On current Fed policy: “By agreeing to keep constant the size of the Federal Reserve’s securities portfolio, the Committee avoided an undesirable passive tightening of policy that might otherwise have occurred.” In case you missed the WSJ article, the Fed is not really easing policy by investing in Treasuries, it is stabilizing policy.
On future policy: “the Committee is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly. The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do. As I will discuss next, the issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using the tool.”
Policy options for further easing: “Notwithstanding the fact that the policy rate is near its zero lower bound, the Federal Reserve retains a number of tools and strategies for providing additional stimulus. I will focus here on three that have been part of recent staff analyses and discussion at FOMC meetings: (1) conducting additional purchases of longer-term securities, (2) modifying the Committee’s communication, and (3) reducing the interest paid on excess reserves. I will also comment on a fourth strategy, proposed by several economists–namely, that the FOMC increase its inflation goals.”
On these, he said:
What the Fed will do going forward: “First, the FOMC will strongly resist deviations from price stability in the downward direction. Falling into deflation is not a significant risk for the United States at this time, but that is true in part because the public understands that the Federal Reserve will be vigilant and proactive in addressing significant further disinflation. It is worthwhile to note that, if deflation risks were to increase, the benefit-cost tradeoffs of some of our policy tools could become significantly more favorable.”
“Second, regardless of the risks of deflation, the FOMC will do all that it can to ensure continuation of the economic recovery.”
Chris Low
Although this information has been obtained from sources, which we believe to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. All herein listed securities are subject to availability and change in price. Past performance is not indicative of future results while changes in any assumptions may have a material effect on projected results.
Where does banking in America need to go? Back to the future.
Article posted on USAToday.com
By Phillip Longman and Ellen Seidman
Last fall, Countrywide Financial, then the nation’s largest mortgage lender, had a curious new idea —or, more precisely, an old one. No longer would it slush foreign capital through Wall Street to make subprime loans. Instead, the lender would depend entirely on deposits from savers who would finance one another’s mortgages —kind of like that humble thrift institution run by George Bailey in the movie It’s a Wonderful Life.
(Web Bryant, USA TODAY)
Sadly, Countrywide waited too long to get back to basics and became the first major bank of 2008 to require a desperate rescue. But it is not too late for other financial institutions. Indeed, with the world’s system of anonymous high finance in crisis, there is a strong case for fostering many more small-scale, traditional depository institutions like George Bailey’s.
So far this year, the failure rate among big banks is eight times greater than among small banks. The latest data from the Federal Deposit Insurance Corp. show banks with less than $1 billion in assets outperforming larger banks on most of the key measures.
According to the theory that brought us bank deregulation, this can’t be happening. Large financial institutions are supposed to be more efficient because of their economies of scale and, more important, because of their ability to match lenders and borrowers wherever they might be. Banks with global reach can take capital from wherever it is in large supply (say China or the United Arab Emirates) and direct it to places where it is in short supply, no matter how distant (say Stockton, Calif., or east Cleveland).
On the strength of the big-is-better theory, global-scale “transactional banking” has been allowed to displace small-scale “relationship banking.” Internet mortgage originators such as LendingTree run TV commercials mocking the idea that a consumer should be loyal to any one bank. “When banks compete, you win,” goes the LendingTree slogan. The message: Forming a relationship with a small-scale banker —as George Bailey did —is for chumps, transactional banking for the savvy.
But is bigger really better? Today we can see that the new system of global transactional finance invested the world’s savings in a spectacularly irrational manner. The savings that poured into underwriting zero-down mortgages on McMansions and tract houses far from jobs could have been more profitably invested in just about anything else, such as for America’s conversion to sustainable energy sources or retooling our manufacturing sector.
In contrast, small-scale financial institutions generally avoided subprime lending, concentrated on traditional mortgages and small business loans, and today are in comparatively good shape. Though vulnerable to a downturn in the economy, they are generally resistant to the financial contagion infecting larger institutions.
It is now clear that a lack of a relationship of mutual interest between lender and borrower was at the heart of the breakdown in global finance. All the players in the system, from mortgage brokers to investment banks peddling “asset-backed” securities, had little interest in whether consumers could actually afford their debt.
Unlike a traditional community bank, most large banks didn’t hold any of the mortgages they wrote and didn’t depend on deposits from the same people to whom they made loans. Instead, they made their money mostly on fees.
In small-scale banking, by contrast, there is a mutual interest between borrower and lender. Both are members of the same community and as such are able to judge each other’s prospects better than borrowers and lenders on opposite sides of the globe.
Put another way, small-scale banks are rich with what Federal Reserve Chairman Ben Bernanke calls “informational capital,” which, he explains, they develop through “gathering relevant information, as well as by maintaining ongoing relationships with customers.”
George Bailey put it better in his clinching argument to panicked depositors. The residents of Bedford Falls could rest assured that their money was safe because they knew one another: “Well, your money’s in Joe’s house. That’s right next to yours. And in the Kennedy house, and Mrs. Macklin’s house, and a hundred others. Why, you’re lending them the money to build, and then, they’re going to pay it back to you as best they can.”
The biggest problem facing small banks today is attracting equity capital from stockholders. Most small banks are privately held, and even for those that are not, interesting the public in bank stocks is not easy. It’s a problem that could get worse for small banks if, after all the bailouts, just a few giant financial institutions control most banking.
We are pleased to see the Treasury Department announce it will use some of its $700 billion in rescue money to invest in small-scale banks. For the longer term, however, we need a dedicated tax on the securitized loan transactions of the rest of the financial services industry. The revenue raised could flow to a federal Community Bank Trust fund to ensure that small-scale banks expand in number and market share.
This would support the capital and other needs that enable community banks and credit unions to serve their communities —including minorities, immigrants and those of modest means. In the movie, George Bailey got to see what the world would look like if he weren’t in it. Today, a world that largely passed him by looks ugly indeed.
Phillip Longman, a senior fellow at the New America Foundation, is co-author of the forthcoming book The Next Progressive Era. Ellen Seidman is director of financial services policy at New America and served as director of the Office of Thrift Supervision from 1997 to 2001.
Article in The Huffington Post
By: Arianna Huffington and Rob Johnson
Last week, over a pre-Christmas dinner, the two of us, along with political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and Nick Penniman of the HuffPost Investigative Fund, began talking about the huge, growing chasm between the fortunes of Wall Street banks and Main Street banks, and started discussing what concrete steps individuals could take to help create a better financial system. Before long, the conversation turned practical, and with some help from friends in the world of bank analysis, a video and website were produced devoted to a simple idea: Move Your Money.
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks — JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo — all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
Meanwhile, America’s Main Street community banks — the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of — are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.
We talked about the outrage of big, bailed-out banks turning around and spending millions of dollars on lobbying to gut or kill financial reform — including “too big to fail” legislation and regulation of the derivatives that played such a huge part in the meltdown. And as we contrasted that with the efforts of local banks to show that you can both be profitable and have a positive impact on the community, an idea took hold: why don’t we take our money out of these big banks and put them into community banks? And what, we asked ourselves, would happen if lots of people around America decided to do the same thing? Our money has been used to make the system worse — what if we used it to make the system better?
Everyone around the table quickly got excited (granted we are an excitable group), and began tossing out suggestions for how to get this idea circulating.
Eugene, the filmmaker among us, remarked that the contrast between the big banks and the community banks we were talking about was very much like the story in the classic Frank Capra film It’s a Wonderful Life, where community banker George Bailey helps the people of Bedford Falls escape the grip of the rapacious and predatory banker Mr. Potter.
It was a lightbulb moment. And, unlike the vast majority of dinner conversations, the excitement over this idea didn’t end with dessert. It actually led to something — thanks in great part to Eugene and his remarkable team, who got to work and, in record time, created a brilliant, powerful, and inspiring video playing off the It’s a Wonderful Life concept. Watch it below.
Within a few days, the rest of the pieces fell into place, including an agreement with top financial analysts Chris Whalen and Dennis Santiago, who gave us access to their IRA (Institutional Risk Analytics) database. Using this tool, everyone will be able to plug in their zip code and quickly get a list of the small, solvent Main Street banks operating in their community.
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be. It’s neither Left nor Right — it’s populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It’s time for Americans to move their money out of these reckless behemoths. And you don’t have to worry, there is zero risk: deposit insurance is just as good at small banks — and unlike the big banks they don’t provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion.
Think of the message it will send to Wall Street — and to the White House. That we have had enough of the high-flying, no-limits-casino banking culture that continues to dominate Wall Street and Capitol Hill. That we won’t wait on Washington to act, because we know that Washington has, in fact, been a part of the problem from the start. We simply can’t count on Congress to fix things. We have to do it ourselves — and the big banks are the core of the problem. We need to return to the stable, reliable, people-oriented approach of America’s community banks.
So watch Eugene’s amazing video, then go to www.moveyourmoney.info to learn more about how easy it is to move your money. And pass the idea on to your friends (help make this video — and this idea — go viral!).
JP Morgan/Chase, Citi, Wells Fargo, and Bank of America may be “too big to fail” — but they are not too big to feel the impact of hundreds of thousands of people taking action to change a broken financial and political system. Let them gamble with their own money, not yours. Let’s turn big banks into smaller banks. We’ll all be better off — and safer — as a result.
Make it your New Year’s resolution to move your money. We can’t think of a better way to start 2010.
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Article from The Huffington Post
By: Camden R. Fine
The people of Bedford Falls were definitely on to something: Locally operated, hometown community banks are worth saving. Community banks can take the time to get to know you. They can make loans to the small businesses in your community that the larger banks won’t touch. Their success depends on building and maintaining good relationships with their customers.
Community bankers are accountable–they have to be. Often they’re dealing with their neighbors, the parents of their children’s friends, the people they see every day during their personal and professional lives.
As the nation’s voice for America’s 8,000 community banks, we couldn’t be happier that consumers are recognizing the benefits of locally run banks dedicated to the best interests of their customers and the overall economic health of their communities. And as the only national association that represents community banks exclusively, Independent Community Bankers of America continues to spread the word that community banks rely on common-sense practices, honesty, integrity, accountability and transparency.
All of this often comes with better rates and lower fees, and access to a real, live person who will take your calls or meet with you to help you plan how to achieve your financial goals.
But we are also leading efforts in Washington to encourage lawmakers to address the real and serious problems that too-big-to-fail megabanks and nonbanks have created. If the people of Bedford Falls really wanted to help the George Baileys out there today, they’d get in touch with their representatives and let them know they’re fed up with bailing out the “Potter” big banks that caused all this chaos. They’d take all that energy born of frustration and turn to the Internet to voice their complaints.
There is a Web site, MyCommunityMyBank.org, that encourages consumers to get involved and send a message directly to members of Congress to hold the big banks accountable and end too-big-to-fail. The site provides an easy way for people to send a message in their own words. No scripts, no over-the-shoulder editing. Visitors are also welcome to post a video or a testimonial.
And while the Move Your Money site offers a sampling of community banks that might be near you, ICBA.org has a searchable database for our nearly 5,000 member banks.
ICBA and its members have been fighting hard against the giant bank and nonbank conglomerates this past year so that Main Street will never again have to bear the brunt of the reckless actions of those out-of-control and out-of-touch institutions on Wall Street.
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