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A community bank is a depository institution that is typically locally owned and operated.^{[citation needed]} Community banks tend to focus on the needs of the businesses and families where the bank holds branches and offices. Lending decisions are made by people who understand the local needs of families, businesses, and farmers.^{[citation needed]} Employees often reside within the communities they serve.^{[citation needed]}

In the United States, community banks are not clearly defined.^{[citation needed]} Most agencies^[who?] base this term on aggregate assets size with varying definitions such as less than $1 billion (Office of the Comptroller of the Currency) up to less than $10 billion (Federal Reserve Board and Government Accountability Office).^[1] Beyond size (as measured by assets), the Federal Deposit Insurance Corporation (FDIC) imposes a number of additional requirements on institutions classified as community banks.^[2] From 1985 to 2004 community banks comprised roughly 94% of all commercial banks in the United States, but the proportion of total national deposits held by Community Banks declined from about 25.89% of all U.S. deposits in 1985 to 13.55% of the U.S. deposits in 2003.^[1]^[3]^[4] The decline in community banking prevalence in the United States has drawn the attention of economists and policymakers, some of whom have argue that community banks play an important role in macroeconomic stability.^[5]^[6]^[7]

References

^ ^a ^b "Trends in Community Banking". FYI: An Update on Emerging Issues in Banking. Federal Deposit Insurance Corporation (FDIC). 18 May 2004. Retrieved 3 November 2011.
^ "Appendix A: Study Definitions" (PDF). FDIC Community Banking Study 2020. Federal Deposit Insurance Corporation. 16 Dec 2020. Retrieved 6 June 2021.
^ Tim Critchfield; Tyler Davis; Lee Davison; Heather Gratton; George Hanc; Katherine Samolyk. (January 2005). "The Future of Banking in America Community Banks: Their Recent Past, Current Performance, and Future Prospects" (PDF). FDIC Banking Review (Volume 16, NO. 3). Federal Deposit Insurance Corporation (FDIC). Retrieved April 30, 2012.
^ Jones, Kenneth D.; Critchfield, Tim (January 2006). "Consolidation in the U.S. Banking Industry: Is the "Long, Strange Trip" About to End?". FDIC Banking Review (Vol. 17 No. 4). FDIC. Archived from the original on July 16, 2012. Retrieved April 30, 2012.
^ Luke Petach; Tessa Conroy; Stephan Weiler (May 2021). "It's a wonderful loan: local financial composition, community banks, and economic resilience". Journal of Banking and Finance. 126. Elsevier: 106077. doi:10.1016/j.jbankfin.2021.106077. S2CID 233917395. Retrieved June 8, 2021.
^ Allan Berger; Iftekhar Hasan; Leora Klapper (April 2004). "Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance". Journal of Financial Services Research. 25 (2/3). Springer: 169–202. doi:10.1023/B:FINA.0000020659.33510.b7. hdl:10986/18128. S2CID 189929482. Retrieved June 8, 2021.
^ "The State and Fate of Community Banking". www.hks.harvard.edu. Retrieved 2024-06-12.