A bank in NYC setting an example for larger banking institutions
Earlier this week, we talked about Lower East Side People’s Federal Credit Union, a small institution specifically serving low- and moderate-income households in NYC. There are many reasons that we at Better Banking Options prefer smaller banking institutions to larger ones; primarily because this allows us to see more specifically where the bank’s assets are being lent out, as the area the bank serves is smaller. However, there are many reasons a small bank may not be the right fit for someone, even if they are interested in Better Banking. Smaller banking options may not provide the specific kinds of loan or banking products they’re looking for, or they may only want to do their banking in person and want a bank with locations across their city.
Plenty of banks that hold $1 billion or more in assets but do a significant amount of housing and small business lending, and these can still be Better Banks for people looking for a larger bank. The only banks you should specifically avoid are those with hundreds of billions of dollars in assets, otherwise known as mega banks. This is because these banks are so big that they’re “too big to fail,” meaning they hold so many assets that their collapse would have drastic effects on the economy. They can invest their assets in unsound investments (like the subprime mortgages that caused the 2008 financial crisis) and suffer almost no consequences.
Ponce Bank is a great example of a bigger bank that still cares deeply about the communities it works in. With a little more than $1 billion in assets, and 13 locations across the Bronx, Brooklyn, Manhattan, Queens and Union City, NJ, they’re a bank of considerable size. However, unlike a lot of banks of such a size, their data reflects a commitment to low- and moderate- income housing, with nearly three-fourths of their housing focus (which makes up 42% of their total tending) going to those households. They’re appropriately loaned out, with 87.9% of their assets being used for loans. They do a moderate amount of small business lending at 6.5% of the lending, but it’s clear their main focus is on housing.
A CDFI as well as an MDI, Ponce Bank emphasizes on their about us page both providing personalized banking services as well as promoting local economic development. Although they don’t have much about their history on their website, they’ve been serving NYC since 1960, and they’re a Hispanic majority Minority Depository Institution. Because they have so many branches across the boroughs, Ponce Bank is a great option for anyone in NYC who wants their deposits to make a difference in their community but wants the convenience and technology of a larger bank. They offer both online and mobile banking, so even those living outside of the city can invest in this Better Banking Option. Check out their website to get started today.