Why Community Financial Institutions Continue To Reign Main Street

by La Macchia Group

In many ways, community banks and credit unions have been the lifeblood of small towns across the country. Leading through their values, community banks and credit unions play a crucial role in supporting Main Street by reinvesting local funds into the community and fostering the creation of local jobs.

Their business model emphasizes relationship banking, where they focus on serving one customer at a time with a personalized approach. This approach helps small businesses thrive and enables families to achieve their financial goals by providing them with the necessary financing.

Moreover, community banks and credit unions are highly adaptable to the changing technological landscape, using innovative platforms to support emerging payment methods while advocating for stringent security standards to safeguard their customers from cybercrime.

We’ve selected our top five reasons why community banks and credit unions continue to reign superior on Main Street.


Local community banks often have a smaller customer base and can provide more personalized service to their customers. They may also have more flexibility in making lending decisions based on local economic conditions and community needs. According to Insider Intelligence, 72% of banking consumers prefer a personalized experience, and this comes not only in the form of technology, but within local brick and mortar branches.


Did you know that 60% of small business loans come from community banks and credit unions?  These financial institutions often reinvest a higher percentage of their deposits back into the local community, which can help support local economic development and job creation.


Community banks and credit unions may offer lower fees and better interest rates on loans and deposits compared to big nationwide banks. Smaller institutions, on average, offer higher rates on interest-bearing checking accounts, savings, and CDs. Also, many times smaller institutions provide better terms on credit cards and have lower balance requirements and overdraft fees.


Community banks and credit unions are often involved in community events and organizations, which helps to build relationships and support local initiatives. La Macchia Group has partnered with many of our clients to support local endeavors such as donation-based coffee shops within branches, classroom spaces for free financial literacy courses, and supporting the handicap community through development of accessible gyms within town community centers. These initiatives build relationships and earn loyalty, and that's something that cannot be replicated in a digital app. 


Local community banks and credit unions are often more stable and less likely to engage in risky financial practices, which can help to prevent financial crises in the local community. According to the U.S. Small Business Administration, banks with assets of $1 billion or less funded 20% of the loans during the first round of the Paycheck Protection Program (PPP) during the COVID-19 crisis, while banks with assets of $10 billion or less funded 60% of the loans. This initial phase of lending provided $300 billion to 1.7 million businesses.

Despite their size, community financial institutions are playing a significant role in supporting small business partners. It certainly is a good feeling to know you can count on your Main Street bank during these unstable times.


For generations, the physical bank branch, encompassing lobbies, tellers, drive-through lanes, and vaults, have been the visible manifestation of U.S. financial institutions. These brick-and-mortar locations have been instrumental in providing customers with a diverse range of financial services that facilitate routine daily activities, such as cashing checks, acquiring small business loans, applying for mortgages, and opening savings accounts. They continue to be the backbone of small-town USA, and that’s something La Macchia Group celebrates.