This week two longtime Rotarians who are also the presidents and CEOs of two of our community banks talked about the banking industry and community banks. Mark Singleton of Citizens National Bank of Texas and Jeff Frazier of Vintage Bank provided some interesting and alarming information about their industry.

First they wanted us to know that the community banks in Waxahachie and Ellis County are doing very well. They have used conservative banking principles and are not at risk from poor financial decisions or excessive reaching for risky business. Their biggest risk is over-regulation.

However, the total number of banks in this country has decreased from about 15,000 in 1990 to less than 7,000 today. Many of these closures result from the over-regulation following the collapses about five years ago. Any bank now needs a “compliance officer” and an “auditor” to make sure they do not run afoul of new regulations. These are skilled, expensive employees who do not add to a secure bank’s operation.

There are four mega-banks or those “too large to fail” in the U.S. and they control 41 percent of all bank deposits here. The largest 36 banks control 69 percent of deposits and the largest 82 banks control 82 percent of deposits. That means that the other 6,858 banks, including the community banks, control only 18 percent, or 98.8 percent of the banks have 18 percent of the deposits.

During the Great Depression the Glass-Steagall Act separated banking and investment so that banks could not be investment houses. In 1999, the Gramm-Leach-Billey Act removed these constraints and the sizes of the banks shot up. Unfortunately, the government did not effectively regulate these banks leading to the collapses around 2008.

How badly did the banks err? J.P. Morgan-Chase was fined almost $1 billion and reached a settlement for another $13 billion. They were still able to pay $38 billion in bonuses to executives last year. Those are billions with a “B.” Fines levied against the largest U.S. banks in the last two years exceed $100 billion – again with a “B.”

In spite of all of this, the largest banks’ market shares have increased. That means that more and more of us are giving our precious money to those who are being fined because of their irresponsibility and greed. The big bank problems are in all of the newscasts and papers.

Mr. Singleton remarked that if you read in the Daily Light that he or Mr. Frazier had been fined you would probably be in his office taking your money out of their banks. Both he and Mr. Frazier have difficulty understanding why this double standard exists. The community banks are locally owned and controlled while the national banks get their instructions and send their profits elsewhere.

At this time you can get mobile banking, online banking, drive-thru banking, debit cards and the personal touch, if needed, in community banks. How often have you seen an article in the Daily Light about community involvement by a national bank?

For more information about large bank problems check your newspaper or the 6 o’clock news.

For more information about the Rotary Club of Waxahachie where we believe in Service Above Self and doing things as a club we cannot do alone, visit the club web site at You can find a U.S. flag subscription and bike ride forms on the website.