I'm excited to work at implementing the CGB model!

Randy Jones, CDO  

Salem, OR

There was a saying in the 70's that "If you're not part of the solution, then you're part of the problem." Common Good Bank can for the first time give people who want to make a difference in their communities, society and world a real choice - a powerful way to withdraw their consent and energy (money) from the present corrupt system and put it toward building something new and truly democratic.

Rick DeVoe

Well, I could talk about the power of harnessing fractional reserve banking for the common good through democratic economics.  Or, I could talk about the ingenuity of blending the best of both credit unions and banks.  Further, I could talk about the amazing possibilities afforded us (The Commons)  through reaping the banks profits.

But, what I find most compelling of all, is being able to say to my son when he asks,

"Why are grown-ups always talking about money?" 

"Because they are trying to make sure that everyone has enough and guess what, they found a way!"

1a) depositor services, including transfers, checking, cards (by 5/2011. OUTSOURCE these service)

1b) inter-bank transaction processing, statements to customers (by 5/2011. OUTSOURCE these services)

2a) the CGB accounting system, CRM, GL, HR/PR, Procurement, transaction processing within CGB (ASAP. ADOPT*)

2b) information sharing and preemptive transactions, for transaction processing within CGB (BY WHEN? HOW?)

3) loans (by 12/2012. CREATE)

4) partnerships, banking relationships, related services (by 12/2012. BUY)

5a) internal accounting, policies, procedures, reporting (by 1/2012 when we have our first audit. CREATE? ADOPT? BUY?)

5b) everything else: business intelligence, decision support, etc. (by whenever. CREATE? ADOPT? BUY?)

* For the CGB accounting system (2), adopt one of these open source ERP candidates: JFire (Richard's favorite), Opentaps, Adempiere, Openbravo

Here's what I think:

• 1a. Agreed. (by 5/2011. OUTSOURCE these services)
• 1b. I disagree. (CREATE)

  Transactions. We will need to react in real time to inter-bank transaction requests — that will require customization. Ideally, if we can hire a Credit Union (or more likely a CUSO) to provide this service and customize the software, let's do it that way at least in the short term. 
   

  Statements. We will want to CREATE our own statements in any case (starting probably with some generic open source financial reporting) because we want to report things that no other bank reports.

• 2a. Agreed. (ASAP. ADOPT*)

  In fact, almost everything we want to do can be structured as accounting, if we set up the accounts right. It will be essential that accounts can be grouped in at least two ways: by type (eg checking account, loan account, interest income, etc) and by owner (viz specific community division or specific customer). For example, we will need to set policies and report on a single community or customer (eg the ratio of stock to deposits in Amherst, MA) AND on account balances across ALL communities and customers (eg total CGB checking account balances or total stock sales). Some "parent" accounts will have children by type and some will have children by owner. If we choose accounting software that allows two or more charts of accounts containing identical bottom-level accounts, then we're all set (otherwise we will have to CREATE such a capability, or do a lot more arithmetic — either way, it will be less secure).
   

• 2b. (by 5/2011 CREATE)
• 3. I disagree. (ASAP. ADOPT*)

  The only thing we want to do with lending that is unusual is WHO DECIDES. We can use standard loan-management software.
   

• 4. Mostly Agreed. (by 12/2012. BUY)
  However, partnerships with credit unions (and possibly banks) is an exception and should be seen as part of 1b and 2a.

• 5a. Agreed. (by 1/2012. ADOPT/BUY)

  Software for managing these things should be pretty standard, so we won't have to create it (unless we want to, at our leisure after the bank opens)
   

• 5b. Agreed. (by whenever. CREATE/ADOPT/BUY)

  No hurry
   

* I will not be looking at any specific ERP candidates. What happened to Kuali? (Richard did you decide it is too complicated?)

Unfortunately, the FDIC has had to step in a lot recently.  Please periodically visit http://www.fdic.gov/bank/histo.....index.html and be reminded that banks are failing a lot right now.  ... There are lots of relevant questions to ask here, including the question of whether the credit markets are in the process of shutting down more, or are easing.  I believe it to be the former, and will likely persist for some time to come.  If so, what's the implication of this for CGB?

Here's another great link - the Problem Bank List at http://calculatedriskimages.bl.....gspot.com/.  Which can be sorted by state, to find all the banks in MA (there now six, up from two when I posted two months ago):

Athol-Clinton Co-operative Bank, Athol
First Trade Union Bank, Boston    
OneUnited Bank,    Boston
Stoneham Savings Bank, Stoneham
The Community Bank - A Massachusetts Cooperative Bank, Brockton
The First National Bank of Ipswich

Taking this a bit further, open any one of the "Enforcement Action Type" documents; for instance the Cease & Desist Order for the The Community Bank, and find (The red highlight added by me just to emphasize of few points about management practices and policies, adequate capital, and supervision.

FEDERAL DEPOSIT INSURANCE CORPORATION
             WASHINGTON, D.C.
                         and
COMMONWEALTH OF MASSACHUSETTS
             DIVISION OF BANKS
_______________________________
         THE COMMUNITY BANK
     BROCKTON, MASSACHUSETTS
(INSURED STATE NONMEMBER BANK)

In the Matter of:  ORDER TO CEASE AND DESIST; FDIC-09-212b

The Community Bank, Brockton, Massachusetts (Bank), having been advised of its right to a Notice of Charges and of Hearing under section 8(b) of the Federal Deposit Insurance Act (Act), 12 U.S.C. § 1818(b), detailing the unsafe or unsound banking practices and violations of law and regulations alleged to have been committed by the Bank, and of its right to a hearing on such alleged charges, and having waived those rights, and having waived any rights that the Bank has or may have under the Massachusetts General Laws, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF AN ORDER TO CEASE AND DESIST (CONSENT AGREEMENT) with a representative of the Legal Division of the Federal Deposit Insurance Corporation (FDIC), and with the Commissioner of Banks of the Commonwealth of Massachusetts (Commissioner), dated June 25, 2009, whereby solely for the purpose of this proceeding and without admitting or denying any unsafe or unsound banking practices or violations of law or regulations, the Bank consented to the issuance of an ORDER TO CEASE AND DESIST (ORDER) by the FDIC and the Commonwealth of Massachusetts Division of Banks (Division).

The FDIC and the Division considered the matter and determined that they had reason to believe that the Bank engaged in unsafe or unsound banking practices and violations of law and regulations.
The FDIC and the Division, therefore, accepted the CONSENT AGREEMENT and issued the following: ORDER TO CEASE AND DESIST

IT IS HEREBY ORDERED that the Bank, its institution- affiliated parties, as that term is defined in section 3(u) of the Act, 12 U.S.C. § 1813(u), and its successors and assigns, cease and desist from the following unsafe or unsound banking practices and violations of law and regulations:

a. Operating with deficient supervision by the Board of Directors (“Board”);

b. Operating with deficient management, policies, and practices;

c. Engaging in hazardous lending practices, including, but not limited to, poor credit administration practices and ineffective underwriting standards and practices.

d. Engaging in practices that produce an excessive volume of criticized assets;

e. Engaging in practices that produce an excessive volume of concentrations of credit;

f. Failing to provide for an effective system to identify problem assets and prevent deterioration;

g. Operating with a deficient allowance for loan and lease losses for the volume, type, and quantity of loans and leases held;

h. Operating with a deficient level of capital for the Bank’s risk profile;

i. Operating with deficient earnings;

j. Operating with a deficient level of liquidity and deficient funds and liquidity management practices;

k. Engaging in violations of applicable laws and regulations;

l. Engaging in contraventions of Interagency guidelines and statements of policy;

m. Operating without proper internal routine and controls; and

n. Operating with weaknesses in the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) compliance program.

___________

We have set a year-end goal (Nov-Dec) to bring closure to the
planning phase and to initiate a development phase. ( The suggestion for
some continued open ended process past year end does not work for me.)

------------

The aspects of CGB-IT:
1> depositor services, including transfers, checking, cards, transaction processing, statements, etc.

2> the CGB accounting system, CRM, GL, HR/PR, Procurement, etc

this is where the question of open-source ERP comes into play; need to make that decision because its core

3> loans

this is what makes the bank interesting and fun

where the question of mifos, micro-finance, alternative currencies, etc.

what distinguishes CGB from all other banks is us doing something unique with the money entrusted to us

in terms of who, what, where and why - the sustainability agenda

4> partnerships, banking relationships, related services

ultimately, a full-featured bank would offer a variety of services

here's where the SAP vision for a universal SOA architecture comes into play

the CGB is both a consumer and provider of SOA services

we succeed or fail on whether we remain competitive in this dimension, so architecture and industry standards are important

some significant buy-in of business-to-business, bank-to-bank, brokered trade

5> everything else that Kurt outlines in the original CGB-IT proposal that he worked on

internal accounting, policy & procedure, fully implemented

meeting externalities in the banking industry

state regulatory authority, reporting requirements

business intelligence, decision support, etc.

Time-line:

<1> and <2> out of the gate, done ASAP, no latter than May, 2011

suggests outsourcing <1> completely

suggests straight forward adoption & implementation of one open-source ERP candidates:

> JFire (my current favored choice)

> Opentaps

> Adempiere

> Openbravo

<3> is where we invest most of the early work - its our market differentiator, so has to be done really well

by the end of 2012 (1 year of development, 1 yr of production repair)

<4> and <5> would also need to be completed early, within the first year of bank operation

meeting our first bank audit (both internal and external) would
need to be a high priority for everyone involved, but not out of the
gate

----------

Some additional perspective on the concept of a chaordic organization:

Human beings like order, so are attracted to computers in our life,
but are tending to chaos, because we fundamentally find all systems of
imposed order repugnant. Life is always messy, including human
enterprise. Both chaos and order must be acceptable - life is a
paradox.

See: http://en.wikipedia.org/wiki/Chaordic

"The portmanteau chaordic refers to a system of governance that
blends characteristics of chaos and order. The term was coined by Dee
Hock the founder and former CEO of the VISA credit card association. The
mix of chaos and order is often described as a harmonious coexistence
displaying characteristics of both, with neither chaotic nor ordered
behavior dominating. The chaordic principles have also been used as
guidelines for creating human organizations -- business, nonprofit,
government and hybrids—that would be neither centralized nor anarchical
networks."

- I refer to these a human dimensions, left vs right brains; also
human intelligence centers informed by the heart (emotional
intelligence) and the brain (intellectual intelligence); also vertical
and horizontal - horizontal control is typically applied, to the
detriment of an organization, so there is top down control; adding a
vertical dimension means peer-to-peer and networking, very much how the
Internet works.

- this suggests, all at once, top-down, bottom-up, and side-to-side peer relationships.

- The only thing that can be achieved is a working balance, and we
succeed despite our personal liabilities. In that sense, no I don't
believe in "extreme programming." I believe in what works, as in what
emerges, sometimes through a methodical disciplined coding style
informed by a plan, and sometimes through a revolutionary insight that
forces a paradigm shift and upsets the working order.

- The "agility" required to negotiate this, and remain balanced should be a prerequisite.

- I met Dean Hock when he introduced his concept of a chaordic
organization at an annual meeting for the Conservation Law Foundation,
and we have remained friends since.

- I met Dean Hock when he introduced his concept of a chaordic
organization at an annual meeting for the Conservation Law Foundation,
and we have remained friends since. Note that Dean is the founder and
former CEO of the VISA credit card association, a core banking
association.

Agenda:

1. Brief Introductions

2. Brief review of where we are organizationally and in IT planning

3. IT Compensation Policy (see proposal here: http://commongoodbank.com/foru.....ion-policy)

4. Next steps

————–

My summary from our compensation conversation is that we want several CGB advances by the end of the year:

1> a CGB-IT Plan,

2> a compensation policy for doing the development work, and

3> funding.

I have taken the lead on the CGB-IT Plan, using Kurt's outline as my starting point, and based on extensive current research. I invite your tolerance for having assumed the lead and invite any contributions you might have.

William has taken the lead on acquiring funding, through initiation of a membership/capital campaign. I recommended that we add two dimensions to funding: a business loan and application for a grant.

The compensation policy proposal is a joint all round current active discussion.

Suggested action for this week:

1> Read the compensation policy thread and add commentary; (if you're part of the CGB-IT team, the compensation policy must be acceptable to YOU)

2> Move forward on CGB-IT planning – visit the CGB IT Design page for an outline and to contribute to the plan.

Kurt King has already expanded enormously on these specifications and proposed data models for some components: CGB Draft IT Plan 2009

I propose that we hold on to those details, but back up a step for a while, keeping discussion at a higher level (less detail) by focusing on the original outline, while we figure out what to write from scratch, what software to adopt without change, and what open source projects and components to modify or branch.

Richard Kerver has done some extensive research on open source options. See our meeting minutes here.

Let's use this IT Forum to discuss IT matters (and avoid using email for discussion, most of the time). Please comment on this proposal or suggest solutions to specific lines in the outline, as a reply to this post.

   4. Involving more people in early phase development activities
      
follow thru on William's short list of 4 people, and others, any takers
so far?
   5. The CGB-IT draft proposal
       discuss aspects
of CGB-IT, as proposed above

   6. The web application development framework, refined
      
Spring + Google Web Tools (GWT) + Java DataObjects (JDO) + app-engine restrictions   
   7. Formalization
of the CGB-IT Team and the CGB-IT Plan
 
---
1. Round table
updates
William:

- working on CGB organization, followup from summer stakeholder
sessions, proposal for a way forward
- met with commercial banker and
Credit Union CEO, with a partnership proposal, for meeting with CU's in
Pioneer Valley

- Word is that CU's feel threatened by the CGB concept; we want to turn that
around if we can
- commercial banker was supportive; suggests
dropping the idea of partnerships with other banks; says CGB could be
explosive, if done right; very encouraging

- also working on the training class for community division organizers,
meeting with trainer Karen Ribeiro; contract is out for organizers, want commitment
through opening of the bank, and a financial stake; organizers will get paid $150
to complete the course; optimistic that it will help recruit members; is
getting materials ready, membership flyer, etc.

- we have a lawyer who wants to volunteer time; not bar approved in MA
-
Jill Stein, wants to include CGB in her Gubernatorial platform
- on
IT front, not done much; see <4> for updates on people

- no followup on Mifos, but will soon
- S2BE Board member
died on Sunday, long-standing; a mentor in alternative economics, a
good friend - condolences
Richard:  just continuing with R&D work
- see below

---
2. Minutes of the meeting 18-Aug, discussion & approval
posted
at http://commongoodbank.com/foru.....ng-minutes
looks
OK

---
3. Common Good Bank Project Development, Updated 8/21/2010
as
incorporated by William, 21-Aug:
A+B+C → F. IT Plan. A team of
qualified volunteers has been actively discussing various open-source
technologies and formalizing best practices for Common Good Bank systems
and operations. A formal CGB-IT Plan will be completed before the end
of 2010, to guide production engineering over the course of 2011. A
mature open-source web application development framework will be
selected. The Apache Foundation's Opentaps and the Grameen Foundation's
Mifos open source projects are examples of projects being actively
considered for adoption, among others. Additional team members skilled
in the implementation of the chosen framework will be brought on to the
project. (Once funding is available, major contributors to the CGB-IT
Plan,

knowledgeable with the underlying technologies, will be hired for its
implementation. See N "IT Development", below.)
F+M → N. IT
Development. Hire a qualified development team (as described in F "IT
Plan", above) to implement the IT Plan.

Consensus on topic; great work!

---
4. Involving more
people in early phase development activities

Updates on people:
-
William - David Pearson - has a lunch meeting set up for Thursday; a
senior technical engineer

- Sam C, not until September
- will continue actively recruiting
technical folks
- talked with Alex V, he's still thinking about it; follow up
-
Richard spoke with someone who may be interested

formalizing fair compensation for services
-
various ways of doing this: stock options, deferred salary, getting a
loan for operational expense

- now's the time to try to formalize something; need a "standard" fair
package for everyone, with flexibility to set terms
- come up with a
proposal & get buy-in, need formal agreement from functional
steering committee (when assembled)

delegate recruitment of others (past volunteer work)?
- William
not sure, might be useful; may want Richard K to give dave & barry a
call

Networking is very useful to finding & recruiting
people
- finding technical people is core to what we're doing

- Linkedin, suggests using it to connect specific people
- send CGB
newsletter to 2600 list
- someone William knows who wrote book on CSS
& HTML; may not herself, but may be able to refer
- job boards,
post there when some compensation package is ready to go

TheServerSide Java Symposium (TSSJS) 2011
- see: http://www.theserverside.com/n.....d_id=60775      

- a community event focusing on current and emerging technologies
in the Enterprise Java space, has opened its call for submissions,
seeking presenters and presentations for TSSJS Vegas, March 16th-18th,
2011.

- Deadline: Latest date to submit proposals: Friday, September 10th,
2010
- suggest sending a proposal; if accepted and we accept back,
then will need to raise & expend funds to attend
- think of this a
necessary networking, to find & enlist developers in our project -
this is the right group

- OK by William, do the draft & send around for comments

---
5.
The CGB-IT draft proposal, aspects of CGB-IT

The aspects of
CGB-IT (overview):

1> depositor services, including transfers, checking, cards,
transaction processing, statements, etc.

2> the CGB accounting system, CRM, GL, HR/PR, Procurement, etc

     this is where the question of open-source ERP comes into play; need
to make that decision because it is core

3> loans

     this is what makes the bank interesting and fun

     where the question of mifos, micro-finance, alternative currencies,
etc.

     what distinguishes CGB from all other banks is us doing something
unique with the money entrusted to us

       in terms of who, what, where and why - the sustainability agenda

4> partnerships, banking relationships, related services

     ultimately, a full-featured bank would offer a variety of services

     here's where the SAP vision for a universal SOA architecture comes
into play

     the CGB is both a consumer and provider of SOA services

     we succeed or fail on whether we remain competitive in this
dimension, so architecture and industry standards are important

     some significant buy-in of business-to-business, bank-to-bank,
brokered trade

5> everything else that Kurt outlines in the original CGB-IT proposal
that he worked on

     internal accounting, policy & procedure, fully implemented

     meeting externalities in the banking industry

     state regulatory authority, reporting requirements

     business intelligence, decision support, etc.

Time-line:

<1> and <2> out of the gate, done ASAP, no latter than May,
2011

    suggests outsourcing <1> completely

    suggests straight forward adoption & implementation of the
open-source ERP candidates:
    > JFire (adding this a candidate,
new)
        - because it can be deployed to Google Cloud (see next)

    > Opentaps

    > Adempiere

    > Openbravo

<3> is where we invest most of the early work - its our market
differentiators, so has to be done really well

      by the end of 2012 (1 year of development, 1 yr of production
repair)

<4> and <5> would also need to be completed early, within
the first year of bank operation

   meeting our first bank audit (both internal and external) would need
to be a high priority for everyone involved

Discussion:

- another piece to accounting puzzle is need for separate accounting for
depositors association; ability to treat stock as deposits; so outsourcing <1> completely may be problematic (provider will have to customize their software for us, but this will be necessary for Common Good Accounts at CUs in any case)

- really need a CFO as part of the discussion, for acceptable banking
practice

- key decision is who we outsource to

   CGB-IT Plan is where we put all this together

   just a proposal right now, for further discussion

   Kurt's list, line by line, useful exercise

   Can have the best vision ... but without ability to execute ... so
that's still top priority

---
6. The web application
development framework, refined
      
Spring + GWT + JDO +
app-engine restrictions

- introduce Google's cloud - app-engine, the concept of state-less data
-
The restrictions simplify the development paradigm - this is good; just
need to live with the restrictions.     

Richard:  The beauty
of the Google App-engine, using the JDO approach to data persistence, is
that it doesn't lock us in.  We can move the data latter if we need
to.  I'm not suggesting that we would need to, or should.  Its a matter
of choosing a cloud vendor well to begin with, and sticking to that
decision through implementation & production deployment.  The
primary reason I foresee is that it might not pass a banking regulation
IT audit, simply because it is too new and their unfamiliarity with it
would cause them to rule it out.  Then we'd have no choice.  Doing so,
however, would not mean we lose any development work.  JDO mediates
persistence for us, no matter what's on the back-end.  That could be an
RDBMS like PostgreSQL, or a private data cloud.  The advantage is
up-front.  By choosing the Google public data cloud we don't have to be
concerned about data management early on, so are not invested in making
all that infrastructure happen - it's handled for us.        

---
7. Formalization of the CGB-IT Team and the CGB-IT Plan

out of time (trying to limit meetings to one hour), so discuss next week

D.  S2BE, the nonprofit sponsor, has been purposely

marginalized.  Its work preceded this point in time and the work going

forward is with the new organizations.

I. The Business Plans are most important.  These are purposed as

external documents and are what potential investors will want to see.  I

suggest making use of the Small Business Center at Clark University,

who have trained personnel, to fully vet and refine the Business Plans.

L. Promotion – changed to green from tan, because its very much in process.

N. thru Q. have been raised to the top and made discrete, separate processes. 

P (N).  Human Systems – I strongly recommend that the entire

organization stop everything its doing and work on the human scale until

the organization is well settled, before proceeding any further. 

There's a lot of relationship building, discussion of roles and

responsibilities, the election of the board, officers, and so forth that

would need to occur before expending "M – Funding."  There should be

assurances of adequate funding, and the available monies would need to

be allocated and accounted for.  This is the point in time when a PR/HR

system must come into play.

N (O). IT Development would begin with the full implementation of

one of the candidate open-source Enterprise Resource Planning systems. 

Again, its the whole organization that must be intimately involved, so

it doesn't begin until the people are assembled, and on board.  Its

about fully implemented systems, meaning computer systems, but also

operational procedures, training & familiarization, testing,

software modification, etc.  I strongly recommend that CGB not seek its

Charter until there's a green light of readiness from everyone involved.

O (P). The Charter is the formality when everything comes

together.  There will necessarily be banking regulators that will want

to pry under the covers.  When they do, we'll want them to see

everything is in order.  If they don't, they'll go away and our chances

of continued success will be significantly diminished. 

Q.  The launch as a new bank will be rocky.  I expect it will

take several long years to stabilize the organization, its systems and

procedures, and build the kind of community trust needed to succeed over

the long haul.

Agenda:

1. Round table updates

2. Common Good Bank Project Development Diagram

http://commongoodbank.com/file.....opment.pdf

3. Involving more people in early phase development activities

4. The CGB-IT draft proposal

-------

1. Round table updates

Kurt

- still mostly busy with family stuff, Steve's auto sprung a radiator leak, so is on to helping with that

- agreed that Kurt's previous contributions have been significant, a de-facto full fledged member of the CGB-IT team

regardless of any additional contributions

Richard

- the CGB-IT team is still just William, Kurt, & Richard

e.g., despite some attention to the need and investment of time

- currently working on first draft of a CGB-IT proposal

(it becomes an "IT Development Plan" when adopted, after revision

up to 27 pages and growing, diagrammed and texted

will be inclusive of common considerations, research & development and more

- commitment is finalization by end of November, so first draft by the end of September (six weeks from now)

- the window of opportunity to join the CGB-IT team is fast closing due to the time constraints

William

- Mifos site, explored, contacted & filled out forms as a microfinance institution, desired collaboration, etc

has not received a response yet

didn't offer programming services as a contributor, which is a different option

- been working on overall organization and a short proposal on where to go to from here

- focus on training for and execution of an intensive membership campaign (Karen Ribeiro's training starts soon)

campaign launching in Western Mass and anywhere else there's a community division startup (what will become a branch)

has contacted lenders in Western Mass, a steering committee that would benefit from the CGB plan

will send out to Board and advisory board (the lunch group) for vetting (hopes people will get behind it)

-------

2. Common Good Bank Project Development Diagram

uploaded and sent link for:

http://commongoodbank.com/file.....opment.pdf

General discussion & questions:

- its a diagram of the CGB development process, includes historical and current perspectives

includes forming the non-profit S2B2 sponsor

Common Good Finance is a project of S2BE, a "doing business as" name

CGF corporation has been incorporated, but is not in play yet

- a federal bank or a state bank? State, seeking a Massachusetts charter

- process:

community divisions organize, raise funds ---> becomes local depositor association (a branch)

as member of a depositor association, will help make lending decisions, part of governance

will sign a contract, not legally binding however

is asking for money (see pdf pg 8 for table of membership class, target, donation + loan + share commitments)

totals: 2,143 people, $250,000 in donations, $1,250,000 in loans, $10,000,000 in share capital

once adequately funded, S2BE seeks a Massachusetts charter

though a state bank, it operates everywhere under permissive banking laws

initial money raised are a combination of donations and loans for the community loan fund

CGB bank share capital is latter

goals of campaign: by December,

2600 people signed up as future depositors and the initial $1.5 million

certain people signed up to be major investors

a "member" signs a mutual contract that stipulates certain fiduciary terms, with CGF (which is really S2BE)

for instance, the "one brick" class - $300 now and $2K latter,

the latter part is for a share in the CGB corporation, charted as a bank,

CGB gets 1 year to show the $10 million, held in escrow under terms

- branch consideration - rule for community division is 50 people and .25 million in deposits

a tenth of deposits go to membership share

can be people or organizations

- has vetted with a small group of individuals (now Kurt & I)

includes socially responsible investment group

Williams's confidence level is 30% right now, but could be surprised

- a formal prospectus will eventually be needed, shares will be a security regulated by banking laws and with the SEC

there's a SEC exemption for a banking initial public offering

a draft prospectus for the private offering exists requiring further work

need the $1.5 million to satisfy state banking regulators

- S2BE holds a limited liability until the CGB has been chartered

contract is a statement of intent, not a promissory note, would not be obligatory

-------

3. Involving more people in early phase development activities

So as to involve more technical people in this phase of the redevelopment of the CGB-IT plan

William will make a call and provide some meaningful opportunities to:

* Alex Volfson

* Sam Cooley

* David Pearson

* Barry Hayes (the Google engineer)

- It was agreed that only William can effectively do this right now (it can't be delegated)

- The window of opportunity is fast closing - say by this time next month? September 15th?

The opportunity is have your name on the CGB-IT proposal, to learn a lot, and work with a great IT team,

and, per William's email to Alex:

"My personal expectation is that we will hire the most valuable people on our design team

to do the development starting around the turn of the year and that compensation will be reasonable."

- volunteer, show proof a capabilities, help get CGB funded, get hired to do the work outlined by the CGB-IT Plan

-------

4. The CGB-IT draft proposal

- No time to discuss more, topic for next meeting

- Richard is working on first draft, by September 15th

- Final draft by end of November

- everyone involved with CGB is on the hook, IT will need to suck the entire organization into the work

so its a major set of decisions

The aspects of CGB-IT:

1> depositor services, including transfers, checking, cards, transaction processing, statements, etc.

2> the CGB accounting system, GL, HR/PR, Procurement, etc

this is where the question of open-source ERP comes into play; need to make that decision

3> loans

this is what makes the bank interesting and fun

where the question of mifos, micro-finance, alternative currencies, etc.

what distinguishes CGB from all other banks is us doing something unique with the money entrusted to us

in terms of who, what, where and why - the sustainability agenda

4> partnerships, banking relationships, related services

ultimately, a full-featured bank would offer a variety of services

here's where the SAP vision for a universal SOA architecture comes into play

the CGB is both a consumer and provider of SOA services

we succeed or fail on whether we remain competitive in this dimension, so architecture and industry standards are important

5> everything else that Kurt outlines in the original CGB-IT proposal that he worked on

internal accounting, policy & procedure, fully implemented

meeting externalities in the banking industry

state regulatory authority, reporting requirements

business intelligence, decision support, etc.

Time-line:

<1> and <2> out of the gate, done ASAP, no latter than May, 2011

suggests outsourcing <1> completely

suggests straight forward adoption & implementation of the open-source ERP candidates:

> Opentaps (de-facto choice)

> Adempiere

> Openbravo

<3> is where we invest most of the early work - its our market differentiator, so has to be done really well

by the end of 2012 (1 year of development, 1 yr of production repair)

<4> and <5> would also need to be completed early, within the first year of bank operation

meeting our first bank audit (both internal and external) would need to be a high priority for everyone involved

There would be nothing to laugh at if the CGB had started as a credit union, had a million members and was now ready to start the bank.

There's a lot to be said for having a track record and proven ability to run the business.  I'd bet my life that there would be NO problem with raising the startup capital for the bank if we could PROVE how well the credit union works.