The Importance Of Locally Owned Banks
The experience of Maywood, IL may be indicative of other casualties that often go unnoticed when banks change hands. It also sheds light on the importance of locally owned banks - in this case the bank owner was well-known for his philanthropy in poorer neighborhoods.
"Across the country, many have bemoaned the loss of locally owned banks, worrying that a faceless national bank will have little interest in a community - aside from making profits. Perhaps nowhere has that issue played out more publicly than in the Chicago area, where Mr. Kelly's Park National Bank was as well known for its philanthropy as for its financial products.
For more than a decade, a silver-haired banker from River Forest named Michael E. Kelly - owner of Park National Bank in the Chicago area and eight others around the country - took an unusual interest in Maywood, decidedly more blue-collar than its neighbors, and its residents are predominantly African-American. He did things most bankers don't do, e.g. buying homes out of foreclosure, renovating them and selling them at cost.
Last fall, Mr. Kelly's private banking empire collapsed, and his profitable, time-tested playbook as a banker and philanthropist failed amid his own misjudgments and the brutal headwinds of the financial crisis. At the direction of federal regulators, his nine banks were acquired by U.S. Bank, the nation's fifth-largest bank, based in Minneapolis."