Join Community Division Organizer, Amie Chaudoir, and Local Common Good Bank Business Partners for a participatory meeting to learn more about how and why a Common Good Bank division will benefit Lane County.

WHEN: Thursday February 4th, 2010

12pm – 12:30pm

WHERE: Tykeson Meeting Room, Eugene Downtown Public Library

For all questions, please call: 541-514-4896

Will Common Good Bank be insured by the FDIC?

Yes.

However, do not place too much trust in the FDIC. If many banks fail at once, the FDIC will not be able to help. Unlike other banks, Common Good Bank is designed to provide local economic stability even in the event of a national or global economic collapse.

I like the idea of helping my community through banking, but will I also directly benefit from having an account with Common Good Bank, Eugene division?

There are many benefits to individual common good bank depositors and borrowers, compared to conventional banks and credit unions. Quantifying or even listing those benefits can be challenging, because the Common Good Bank model is so community-focused. Nonetheless, here is a specific example in which an individual might save 40% on his or her deposits, while sharing in $1,100,000 of community benefits.

How will Common Good Bank operate its highly automated online divisions?

For the first year,  the Banks functionality will be outsourced by the Connecticut Online Computer Center.  Ultimately Common Good Bank will want its own software, but this might take a few years for such revenue as to afford this.

How many employees will Common Good Bank have?

Five. Our CEO, Chief Executive Officer, and 3 customer service staff.  As well, there will be  a 12 member board.  The remainder of the Common Good Bank staff, such as the three division advisers in each community, will be independent contractors. Much of the work will be outsourced to existing organizations as well.

I understand each division is responsible for its capital adequacy, cash reserve, and solvency, as well as compensation for the Division Advisors and our non-profit partner.  But how are the operating costs of the whole bank being paid?

Each division will give equal percentage of it’s profits to the bank operations (home office), so wealthier communities will be contributing more than less wealthier communities.

Will I get charged late fees, over draft and other miscellaneous fees on my bank account?

Yes, but everyone will have a reserve credit cushion.  Normally, if you cover your overdraft quickly, there will not be a fee.  Our intent is to not have as many miscellaneous fees as other financial institutions. The purpose of Common Good Bank is to serve the community and its individuals, so we will not be nickel and diming our account holders.  On the other hand, if people abuse this, there will be fees attached.  Our general philosophy is that fees will cover labor required for the service provided.

When will a Common Good Bank division be opening in Eugene?

The Eugene division will be ready to open within a few months after Common Good Bank opens. We still need tax-deductible donations of a few thousand dollars for the start-up costs of Eugene’s division, but with our community working together, we can make it happen.

We are expecting Common Good Bank to open in Western Mass in 10-15 months.  To do this, we need to raise $1.5 million in investments before applying for the state charter.  If you would like to invest in Common Good Bank™ once it exists, or would like to see if you meet the requirements to be an angel investor, check here for a quick 10-second sign-up.  If you have questions about investing, or would like details contact Amie Chaudoir.

Will a Common Good Bank division in Eugene compete with or hurt the local Credit Union with which I have a good relationship?

A Common Good Bank division in Eugene will be a bank working for our community, so yes, it might compete with local credit unions, but it does not need to.  A common good bank division is another type of investment: it is your investment into our community at large.  Account holders with Common Good Bank may continue their primary banking with the financial institution of their choice, for, just a little bit of money deposited with Common Good Bank will create large profits for Eugene.

In fact there are new collaborations being made between common good finance and credit unions to act as our non-profit partner helping people to open accounts and apply for loans at Common Good Bank.  As a non-profit partner, these collaborating credit unions will be adequately compensated.

Can I make a deposit now?

No, you can’t make a deposit until Common Good Bank opens. However, you can help NOW make it possible by joining as a Founding Member.

What will the interest rates be on deposits and loans?

Common Good Bank does not exist yet, so by law we cannot discuss interest rates, except to say that we plan to offer rates that are competitive with what other banks offer.

Can I invest now?

Maybe! If you qualify financially, then you can be one of our angel investors.  Take our short Investor Survey and we’ll let you know. Common Good Finance needs to raise $1.5 million before applying for common goods bank’s state charter.   You can help make that happen, with no-obligation, in a 10-second signup.

If you have questions about investing, or would like details contact Amie Chaudoir.

How do I withdraw money and make deposits without a bank building?

Account holders will have a debit card to make withdraws at our local retail business partners (convenient and current community epicenters).  Deposits will be mailed into headquarters in Western Mass. (liken the good ol’ days).  Monies will be held at headquarters, but each Common Good Bank division will be  financially autonomous: Eugene’s profits will be held in escrow for Eugene.

The Eugene division account holders can chose to vote on having a bank building and ATM machine if we want, but neither are necessary. Some of our business partners will act as virtual ATMs (cash back with no purchase necessary), and our non-profit partner will help people open accounts and apply for loans (for people who want personal interactions instead of performing these operations online).

Without a bank building and ATM machine(s), over-head costs are kept to a minimum so that profits for our community can be maximized!

As a business owner, I spend thousands of dollars annually on fees for processing credit cards.  Will a local common good credit card minimize this cost for me?

Yes!  The Common Good Bank debit card and local credit card will be FREE for all businesses and account holders: no processing fees if the business has an account with Common Good Bank™.  With Common Good Bank™  as the credit card provider, we are choosing not to charge businesses a processing fee.  This is possible because when swiping the card, money is electronically moving from one CGB account to another… fees are not necessary.

If the Common Good Bank credit card has a visa or mastercard logo on the card, then the card can be used for purchases at non-member businesses and there will be a processing fee for the business.

Common Good Bank debit cards are also free for account holders and local businesses.

Why a bank? Why not a common good credit union?

Common Good Bank is designed to be not-for-profit, community-spirited businesses. So why not organize it as a credit union, an already-existing legal structure for tax-exempt nonprofit financial institutions? The short answer is that banks can do more than credit unions. Besides, credit unions are regulated in a way that prevents them from giving away very much of their profits and prevents them from growing quickly. Here’s how it works:

All banks and credit unions are required to maintain adequate capital. For stock-based banks, of course, capital means stock. For credit unions and mutual banks, adequate capital means retaining enough profits so that the ratio of net worth to deposits is at least 8%.

For example, let’s say a credit union has assets of $108 million – $8 million above and beyond the $100 million that it has borrowed from the depositors (as deposits). It has, in the view of the regulators, barely adequate capital. Now let’s say the credit union wants to expand by 10%, accepting another $10 million in deposits. It cannot do this until it has earned $800,000 more (or received a grant for that much), after all the costs of doing business. The credit union cannot give those profits to worthy causes; it must hold onto them indefinitely.

Now look at a similar situation in the Common Good Bank™ model. Say the bank has sold $8 million in stock and has $100 million in deposits. In the view of the regulators, the bank has adequate capital. Now if the bank wants to expand by 10%, all it has to do is sell another $800,000 in stock. Typically, the new depositors themselves will buy that much stock. Meanwhile, any profits made by the bank (about the same amount of profits as a credit union would make) can be given to food pantries, public education, or whatever the members decide. So the bank can grow much more quickly and give much more to the community than a credit union can.

In spirit and in effect, Common Good Bank is a credit union organized as a stock bank, in order to advance the greater good more effectively.

Why will Common Good Bank use the fractional-reserve system?

Many people who have become disillusioned with our current economic system mistakenly believe that the fractional-reserve system is the problem.

In the fractional-reserve system, banks are allowed to lend out a certain large fraction of the amount that has been deposited. In the United States, this fraction is 9/10. Each loan creates new money, which can then be deposited in the same bank or in a different bank. Most of that money (the same fraction) can then be lent out again, creating more money, and so forth.

Overall, the result of this practice is a several-fold increase in the country’s money supply (for example, by a factor of ten in the United States). But each bank can only lend out a fraction of what it has received as deposits, so it is not always obvious from the banker’s point of view that any money is being created.

The name “fractional-reserve” is meant to suggest that something is being held “in reserve”. However, since almost all money is just database entries, nothing real is held in reserve and nothing real is lent out. For example, even if you deposit a million $1 bills, the bank can lend out $900,000 and still have every one of those dollar bills in the vault. All money, including paper money, is just an accounting system, keeping track of who is entitled to how much goods and services. The so-called reserve is simply an accounting rule that limits how much money a bank can create as loans.

The fractional-reserve system benefits some banks more than others. Common Good Bank will encourage borrowers to spend their money locally and especially to use their borrowed money to pay other common good bank customers, so that Common Good Bank (instead of some other bank) can lend that money out again, for the greater good of all.

Where did this idea come from?

The idea for Common Good Bank began in 2002 in Ashfield, Massachusetts, a small rural community in the foothills of the Berkshires. It began with a spiritual imaging exercise and informal theoretical discussions on how our society  especially our economic system and governance  might be restructured to work better, to create a more peaceful, just, and environmentally sustainable world. Inspired by dozens of other economic systems, through many surveys, discussions, experiments and detours, the Common Good Bank model evolved. Hundreds of professionals and volunteers have contributed to the design.

Most of the labor for researching, developing and promoting this project has been volunteered. We have raised over $85,000 in pledges and contributions, consisting mostly of in-kind contributions. We are still seeking an additional $20,000 in contributions, to cover the expenses of securing a charter for Common Good Bank. (You can help by making a donation.)

For a more personal account of the early stages of the project, see this article by our Project Director, that appeared in the Quaker publication Friends Journal, July 2006.

Why hasn’t anyone done this before?

Every individual piece of the Common Good Bank™ plan has already been done successfully elsewhere (See “Spectrum of Economic Systems” and “Where Is CGB Democracy Used“). No one else put all these pieces together in this way because no one thought of it. Until now. And it took hundreds of people working together to come up with this synergistic combination.

Moreover, it It is not easy to start a bank. It takes a lot of money. Since no one will be making a large personal profit from this bank, a couple dozen community-minded people will have to put in $50-$100 thousand each AND thousands of people of lesser means will have to invest what they can comfortably afford. (According to securities regulations, only individuals with over a million dollars net worth can invest in a bank project before it gets a charter.)

Won’t Common Good Bank just get bought out by a bigger bank?

No. Common good bank™ organizing documents will contain several provisions to prevent a takeover. For example, return on investment will always be limited to the true rate of inflation, which will make any takeover bid financially unrewarding. No one would want to take over Common Good Bank! Also, the common good aspects of Common Good Bank are contractually subject to oversight by Common Good Finance, which owns the “Common Good Bank” name and logo, so if the bank stops conforming to the Common Good Bank™ model in any way, it will cease to be called Common Good Bank.

The clincher is that voting is one-person one-vote, rather than one-share one vote, and a 5% minority can veto any proposal that is morally reprehensible (see the section on Common Good Bank™ democracy). So a larger bank trying to acquire Common Good Bank would have to convince 95% of the depositors to give up their control. Since each community division of Common Good Bank will vote independently after public discussion and debate, the chance of 95% being successfully hoodwinked is vanishingly small.

If return on investment is limited to the rate of inflation, why won’t investors just buy government bonds instead?

First of all, the true rate of inflation of the dollar is consistently higher than the United States government reports (see, for example, George J. Paulos: “An Alternative Inflation Index“, September 08, 2004). Until a credible and reliable measure of inflation is developed, Common Good Bank will calculate inflation (and therefore the expected resale value of Common Good Bank™ stock) as prime minus 1.5%. Over the past thirty years, the true rate of annual inflation and prime minus 1.5% have both averaged out to about six percent.

Many investors will invest in Common Good Bank because they care about social and environmental “returns” as well as financial ones. Low-income depositors will invest small amounts because, by design, stock in Common Good Bank will act more like a high-interest one-month certificate of deposit (CD) than like typical stock. Also, by design, stock will be so easy to buy and sell, through simple transfers to and from a checking account, that depositors will be happy to choose a higher interest rate than they receive for their ordinary deposits.

“Be the change that you want to see in the world”

Mohandas K. Gandhi

]]> http://commongoodbank.com/2009/10/general/eugene-faqs/feed 0 http://commongoodbank.com/2009/10/cd/eugene-or/eugene-community http://commongoodbank.com/2009/10/cd/eugene-or/eugene-community#comments Sat, 03 Oct 2009 19:06:51 +0000 achaudoir http://commongoodbank.com/?p=538 Eugene Page Links>> Events : Community : Division : FAQs

Eugene now has over 140 community members signed up as interested in opening an account with a Common Good Bank division once established here!

If you also would like to support a common good bank division being established in Eugene, with no money down or obligation, in a 10-second sign-up

Sign up today to get involved in creating a common good bank division in Eugene!

And… join us for monthly potlucks where we discuss the Common Good Bank model

Next potluck: Wednesday June 30th, 6:30pm

Community Profits

• All of Common Good Bank’s profits will go to schools and other non-profits.
• Eugene account holders will vote on which such organizations are the beneficiaries of our bank division’s profits
• Half the profits go to the local community.
• Half are given away outside the local community to organizations voted on by the CGB Eugene account holders.
• Depositor owners meet to discuss issues and use a penny vote to decide what gets funded.
• Each person gets one vote.

Regenerative Socially Responsible Lending

• Common Good Bank will provide a full range of secure, FDIC-insured banking services.
• They will lend only to socially and environmentally responsible borrowers.
• All borrowers have to report on their social and environmental impact.

Here’s how Common Good Bank will be different:

• All profits go to schools and other nonprofit organizations, to benefit everybody.
• Investments will maximize social good, not just profit.
• Traditional banks are managed by corporate holding companies. Common Good Bank depositors in each community decide their own investment priorities and which community-spirited ventures will get the bank’s profits and created money.
• Traditional banks are prone to corruption and failure on a catastrophic scale. Common Good Bank will offer superior security, through transparency, community-level management and cooperative contingency handling.
• Traditional banks siphon money out of our communities. Common Good Bank will give the depositor investors an inflation-rate return.

Thank You Eugene Business Partners!!!

Thank you for your  webpages: Common Good Bank, Eugene Division

Thank you for your tech-support and Eugene Bank Page

A bakery specializing in pastry, cakes and desserts

Wednesday, June 30 2010 -

Common Good Bank Potluck!

Supporters and people interested in following the progress of Common Good Banks… Come share great food, mingle with your neighbors, explore the common good bank model, and get updated on the Restructuring of Common Good Finance.

Circle of Children will also be participating in the evening with information and supporters… As we are all working toward the sustainability of Common Good!

Where: 972 and 1/2 West 12th Ave.  (965 W. 12th Alley- for directions online) 

When: 6:30pm

Theme: Local food ingredients - Share a dish or drink, grown or produced in or around Eugene.

The fall of 2009 was filled with wonderful, enjoyable and productive potlucks with Eugene’s common good bank prospective account holders, new supporters, business partners and other curious community members.  Eugene business owners, school teachers, healers, automobile mechanics, and retired professionals gathered in Community Division Organizer, Amie Chaudoir’s home to share delicious foods and ideas of how we want our Common Good Bank, Eugene Division to serve our community and businesses.

Common Good Finance (the Co. establishing CGB) has been under major organizational restructuring this year, and we are excited to share the ‘Good news with everyone! …. Come join us on Wednesday, June 30th!!

Feel free to call with questions or ideas… Amie @ 541-514-4896

Eugene Page Links>> Events : Community : Division : FAQs

Common Good Bank will be the framework for a new economic system. A democratic, community-based system that puts people and planet first!

• This model is already supported by thousands of individuals and a dozen national nonprofit organizations.

Who Are We?

Who is Behind This Plan?

• A dozen respected national nonprofit organizations, including UFE, POS, CoopPower, EarthAction, PDF, Center for the Advancement of a Steady State Economy, and Class Action.
• Eugene business partners include: Green Solutions Printing, Natural Choice Directory, Oregon Publishing, TLP- Local to You, and Sweet Life Patisserie with more collaborating in the coming months.  If you are interested in partnering with us to support and endorse a common good bank opening in Eugene, please contact Eugene’s Community Division Organizer, Bill Zwicker at: 541-684-0604 or Amie Chaudoir at: 541-514-4896
• Our 30 staff members are working to establish Community Divisions in communities all over the United States. Organizers in several other countries also are eager to get started, including Canada, France, Zambia, Jamaica, Colombia, India and elsewhere.
• A 50-member Project Advisory Board, with a broad range of experience and expertise.
• A 10-member Planning Steering Committee to oversee strategic plans for funding.
• Over 2000 people signed up as founding depositors.
• Our top executives are outstanding. Our CEO, has been in banking for 28 years and he experienced in virtually every aspect of community banking. He recently served as Senior Vice President and Chief Operating Officer of North Country Savings Bank in Canton, NY.
• Lynnette Colin, our Chief Investment Officer, has worked in credit unions, banking and community development for over 20 years, most recently as the New Orleans branch manager of Hope Credit Union.

A system of democratic, community-based economies that puts people and planet first is vitally important to human survival and well-being. If you see this project for what it is and what it can be, I hope will join me in making

Common Good Bank a reality.

Business Model

• Technically CGB will be highly automated internet bank, but with a strong local presence.
• Any community with 50 or more depositors will have its own virtual common good bank, with deposits, investments, and profits tracked separately and local democratic guidance.
• No branch buildings are needed so common good banks can expand very rapidly.
• Instead, established local businesses and nonprofits will provide some simple local bank services.

Economic Environment (starting a bank NOW?)

But is it a good idea to start this bank in the current economic climate? YES!

The current financial crisis was caused by big banks with small ethics.

• Common Good Bank is most similar to credit unions and community development financial institutions, which are doing fine.
• Being able to start with the latest technology and a clean investment slate is a great advantage.
• Most importantly, we need Common Good Bank NOW, for a secure, sustainable economy.

Thank you to all The Local Eugene Business Partners!

Together we are establishing a common good bank division for Eugene!

Thank you for your  webpages: Common Good Bank, Eugene Division

Thank you for your tech-support and Eugene Bank Page

* A bakery specializing in pastry, cakes and desserts