Your Friendly Neighborhood Banker? : Daydreaming Could this year's financial troubles re-invigorate smaller, community banks?
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Your Friendly Neighborhood Banker?

With all the bankruptcies and bailouts this week, it's easy to feel as if the world of finance is nothing but doom and gloom. But for some, there is a silver lining to the Wall Street meltdown.

I recently called the National Banker's Association to get a sense of how the crisis has been affecting smaller banks. They recommended that I get in touch with Paul Hudson of Broadway Federal Bank

The bank was founded in 1946 to help African Americans living in Los Angeles. Back then, Mr. Hudson told me, most banks wouldn't provide loans to then, and his grandfather, Dr. Claude Hudson, saw an opportunity to do both business and to help build the community. Today, they have five branches and 400 million dollars in assets.

Over the years, Broadway Federal has seen its share of hard times. During the civil unrest that followed the Rodney King Verdict in 1992, a fire destroyed the bank's central headquarters. But, Broadway Federal survived. And they continue to do so, even in today's troubled times.

In fact, Paul Hudson told me, current events have actually helped their bank. The collapse of larger financial institutions has created a change in attitude towards small banks like his. "Most people have no relationship with their bank," he explained. "It's the most impersonal relationship they have."

As he said this, I thought about my own bank. Like many other Americans, I've put my money in one of the nation's bigger institutions because it seemed like the "right thing to do." I take comfort in knowing that I can visit any of its nearly 7000 ATM's and get cash any time I want. I appreciate being able to pay bills online, without ever having to write a check. I appreciate that I never have to wait in line because I hardly ever have the need to go inside my bank.

But, as I sat inside Paul Hudson's bank, I began to think I was missing something. It does seem rather odd that all of my money is protected by a group of people I have never met. It might make me feel a lot more connected if I did business with a smaller bank, one where I actually looked people in the eyes and talked with them about my transactions.

Bigger isn't always better. As gas prices soar, more Americans think about buying smaller cars. As Starbucks pop up on every corner, many folks go to smaller, independent coffee shops to have an experience that seems a bit more personal. As we hear more about the environmental impact of flying food in from all corners of the globe, a lot of people are choosing to buy locally grown products, often at their neighborhood farmer's market instead of the big box grocery stores.

Maybe in the wake of this year's financial troubles, we'll start seeing a trend of people investing in their smaller community banks, too.