Like most towns suddenly left un-banked, people in Six Mile could not believe
that their bank would suddenly decide that it no longer wanted to do business with its citizens. First Citizen's has been in the community for twenty years. Prior to then, NationsBank had a branch. The building itself has been a bank since 1919, when Bank of Six Mile opened its doors.
There are approximately 675 people living in Six Mile. Greater Six Mile counts about three thousand people. About 22 local business and church leaders from the Six Mile area turned out for a community meeting after the closure occurred.
"A bank has occupied that little 700 square foot building in downtown Six Mile for most of the last 94 years," says James Atkinson, a bank compliance consultant who now serves on the Town Council. “It serves as a depository for church deposits or issues with folks having to travel approximately 10 miles to a bank or change for businesses or sit down services from your banker, whether it involves a loan or IRA among other things.”
But Six Mile is not going to go away. They have an interesting idea - and one that is somewhat timely on a regulatory front - to bring home another bank.
Six Mile is trying to convince First Citizen's to deed the building over to the town. In turn, the town wants to convince someone - perhaps Congress in their estimation - that this kind of action should merit credit on a Community Reinvestment Act exam. In fact, the Town wants to suggest that a regulator should credit not just the donor bank but also the bank that takes over the branch.
But according to Atkinson, First Citizen's does not want to do that unless they be sure that it will actually bear results. Thus, a proviso asserts that the Town has to find a new bank within six months of the closure in order for the deed to be conveyed.
The larger point - that a bank could get CRA credit for donating a branch to a community - could be affirmed by Congress, but doing so would take legislative action. That could be a sticking point. It is hard to imagine a time when Congress has been more divided, an unfortunately it is hard to imagine an issue that divides the parties much more than does the CRA. CRA seems to have been conflated (wrongly) with sub-prime lending.
If it was to find a fit, it would be through the rule-making process.
Turns out that the timing could not be much better, though, as regulators were asking just this kind of question recently. Specifically, they were asking how CRA exams might do a better job of awarding credit from community development activities in rural areas.
Sometimes, bankers say that it is hard to find the right opportunity to work in rural areas. While there is plenty of evidence to suggest that rural areas are often very under-served, it is well-known that there are not enough partnerships to be had in those communities. Most of the non-profit housing developers, IDA programs, credit counseling agencies, or small business incubators that could serve to funnel projects and individuals to banks are located in cities. In North Carolina, for example, there is a surfeit of good work to find in cities but far less in places like Bertie or Scotland Counties.
Banks generally want to do only what they do best - write checks for sound loans. They don't want to actually go and build houses or help people shore up their credit. That is far easier to do in urban areas.
The existing framework of the CRA blunts their hunger for rural projects, however. Generally, a bank is allowed to do CRA work in only a small fraction of the rural areas that they serve. A big bank with branches throughout the Carolinas might only be assessed for service in four rural counties.
Meanwhile, people in Six Mile are getting anxious.
"The bank was used by area churches," says Atkinson "but also by the Town itself for cash deposits. Other local businesses using that branch for change or cash deposits must now travel 10 miles for banking services, which is very difficult for one-or-two-person small businesses. Such businesses lose an hour of productive time just to make the 10 mile trip."
"The lack of a full-service bank could serve to impede future business growth," adds Atkinson. "Dealing with a bank outside of the community means dealing with a bank that does not understanding the community or its lending or deposit needs."