Nov 28, 2018
Small cities, small towns and rural areas are facing a variety of structural headwinds, from demographic declines to globalization to the digital transformation of the economy. But locally owned community banks remain a strong countervailing force to help these communities navigate the transition, economic development expert Aaron Renn says on the latest ABA Banking Journal Podcast.
Renn, who is a senior fellow at the Manhattan Institute, also offers ideas for bankers to consider as they contribute to local economic development through their lending, investing and participation in civic organizations, including tips for “exporting lifestyle” to nearby commuter hubs, identifying key local assets, and finding the kinds of infrastructure investments that actually pay off. He also flags risky or ineffective development strategies.
However, the continuing bank consolidation trend remains a challenge, notes Renn. He describes consolidation in a variety of industries — utilities, retail, manufacturing — as “one of the great unappreciated negatives in the civic culture of cities” as key decisions are increasingly no longer made by local stakeholders.