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I would like to charter a new bank with a simple concept: 99% of the profit goes back into the communities it serves.

I would like to charter a new bank with a simple concept: 99% of the profit goes back into the communities it serves. I’m not reinventing the wheel! This bank works like a regular bank. The only difference is that after paying interest to account holders, paying employees, rent, taxes, holding reserves and all other operations and management costs, 99% of the profit that would normally go to stakeholders, stockholders or private hands will be used to fund community projects.

Bank 99 will pay interest to its account holders like any other bank and all other functions will remain the same as well. The key fundamental change is that 99% of profits will be used for projects like fixing roads, building parks and libraries, offering job training and many other projects that will all contribute to the community as a whole. Basically, Bank 99 will offer its account holders unprecedented opportunity to invest in themselves and the communities in which they live. Taking on part of the cost of fixing roads and helping with other public/municipal needs that are usually taken care of by the government via tax money means that, in theory, the community should get a tax relief. The best part is, this will be done with the interest earned on the community's money without asking for a handout. Account holders get to vote for projects online.

Instead of working like a Credit Union or other banking models where members are paid small dividends, say, $5, BANK 99 will use big chunks of the money without red tape to take care of community needs. For example, let’s say after all the "expenses," we have a profit of 1 million dollars - BANK 99 will put $990,000 back into its community. Imagine if we use $250,000 to fix streets and clean up the town, another $300,000 to help fund schools and after school programs and the rest to start construction programs for new libraries, parks and more.

For more information please visit: www.facebook.com/startbank99 and click the "about" section.

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    Apr 20 2014: Will the kind of bank you propose grow and prosper?
    • Apr 27 2014: Thank you for your comment

      Please see my answer to MR T. I think that is what you are asking.
  • Apr 18 2014: I think you have a great idea just not wise to call it a bank. were do u plan to start and when?
    • Apr 27 2014: It is a bank, and there is a long way to go before it can be chartered.
  • Apr 18 2014: But thats what im saying there is no benefits from your bank because your giving money back to the community not maintainin or gaining. Thats not your goal so its not logical to make a bank if its not gonna provide what people expect from that title. Your better off establishing your own idea not a bank just another way to become a treasury for the city or state which is a lot to support
    • Apr 27 2014: There are benefits to me and the community. It is not a treasury of any sorts. This is just a business, it's not trying to support an entire city or state or take over anything. It's just supplementary income. I'm not sure where the confusion is? Please see: http://www.philanthropy.gr
  • Apr 17 2014: My suggestion is tht you dont make a bank for public people to use. Money thrown in the hands of stockholders ect is to increase the money they get in banks if im not mistaken sort of thrive off loans. My suggestion is that you open up a facility directly for the commmunity in different states and ask people to support your cause. Bank was a good idea but the system itself doesnt work that way.
    • Apr 17 2014: Thank you for you comment

      I'm not sure I understand what you are saying? And, there are no actual stock holders for this bank, and that is the biggest obstacle in creating this bank. Raising funds from people who don't want any returns.
  • MR T

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    Apr 16 2014: Can you explain how you would achieve growth?

    Cos at the end of the day those communities will always want more money.
    • Apr 17 2014: Thank you for your comment (1of2)

      I am not sure if you are referring to growth of the company or economic growth?

      If you are talking about economic growth, first I would like to say that this idea goes well beyond economic growth. I believe it would bring communities together and much more…

      As far as economic growth I believe Bank 99 would do a better job then any other Bank. In the most "basic" way, banking is just a customer service industry considering how tightly money is regulated and controlled by the federal reserve.

      Bank 99 will actually accelerate economic growth over time. The more people work, the more innovative they are in starting new businesses and such, and the more they earn, the more money Bank 99 can put back into the community. The more money Bank 99 put's back into the community the more opportunities it will create, the more people will earn, the more they will put back into the bank, the more the bank will put into the community. It's a self sustaining cycle and it works by people just doing what they do. A fireman might have $1200 in his savings and now that $1200 will be contributing to the community even if in a small way compared to someone who has $500,000 in their account.

      The profit can be used for repairs to infrastructure creating short term constriction jobs. Profit can be used to build parks and libraries creating more short term construction jobs and long term maintenance and librarian jobs and more. Not only that, but by taking on part of the cost of these community things our taxes should stop rising and maybe even someday (Long away) start to decline, thus, freeing up more government money (which was collected via our taxes) to be used for more projects. So the economy is growing from within and without.
    • Apr 17 2014: (2of2)
      If you are talking about the growth of Bank 99 there are many ways to do this, but it is not necessary for it to grow. It can become the "mom and pop" shop of banking and just remain in one community. Other people would be free to use this model and idea in their own communities as long as they follow in the sprit of the model. The company can also be grown from the 1% not reinvested, or set aside a certain amount just for that purpose as part of O&M costs. This is a long term plan and the time it takes this company to grow we can use to see the influence of it in the community and gain more data on how well it is doing and if it is worth spreading to other communities. All the books of Bank 99 would be open to account holders online with as much information as the law allows.

      For the second part of your comment: This is a business and not the government. We are not giving away anything, so it doesn't matter how much the community "wants" more money. We only answer to the account holders and the community only gets out what the community puts in. This isn't free money we are printing, it is based on the work of every single person who will hold an account with us. This is not welfare or a hand out.
  • Apr 16 2014: I'm interested in the idea of a bank that returns to the community.
    Local credit unions are supposed to have better banking(interest, loans, service, etc) and contribute to the community that they are in. However, every time I've tried a credit union it been disappointing. By taking a standard bank and flipping the profit allocation around so that a large part of it goes to community efforts (education, health services, etc) I would be inclined to bank there just for that. The service and online presence does have to be top notch. I bank with 5/3 because of the service and online presence.

    Careful consideration has to be made in selecting people to run bank99. I suspect that the local bank managers can make the same or more than standard banks. However, the senior leadership will be ridiculously underpaid as compared to standard banks. As such, motivations have to exist outside of purely financial.

    Thoughts?
    • Apr 16 2014: What motivates volunteers? What's wrong with a charity bank run by volunteers?
      • Apr 17 2014: @ Rodrigo: I'm only interested in Business. YOU, however, are free to set up anything you like. This is America and you have that freedom. Start doing research and you will start to see the obstacles you have to overcome.
    • Apr 17 2014: Thank you for your comment @ PAUL (1of2)

      Simple answer: I don't believe that the most gifted people in the world are motivated by money at all.

      You said, "senior leadership will be ridiculously underpaid." I think I see it the other way around. I think currently senior leadership is ridiculously over paid. Now don't get me wrong, there are people who really do deserve whatever they get paid and I have nothing against them. However, this "senior leadership," whom have convinced us that their market is worth a 15 million dollar salary nearly bankrupted the economy and brought this nation and the world to an economic disaster. Thats what we seem to have paid them for.

      I can't seem to find the link so don't quote me, but last year I had come across a list that said that, "Banking" was one the safest businesses to operate while restaurants were one of the riskiest based on their failure rates. So these guys that make 5+ million a year took one of the safest businesses in the world and drove it into the ground and the country had to bail them out. I think they have driven their own value way down, it is simple economics. At some point, they may have been worth something but considering the recent history, and even before that with the 1980s bailouts and I think even before that, there is no 10 million dollar market for them; you may disagree. Look at CJ2K, he had a huge market all those years with the Titans but now he's sitting around waiting for a team.

      It is clear to me that in most cases money and talent have nothing to do with each other.
    • Apr 17 2014: @ PAUL (2of2)
      I recently watched a documentary called, HAPPY. In the documentary they showed a guy who was a banker, and a successful one. He quit his job and moved to India so he could work in Mother Teresa's Home For The Sick and Dying Destitutes. He has been feeding and cleaning the poorest of the poor…How does money fit into his world? Where is his motivation?

      In the same movie they said that the difference in happiness from a person making $5,000 to a person making $50,000 was huge but the happiness level between a person that earns $50,000 and a person that earns $50,000,000 was not dramatic due to something called the Hedonic Treadmill (https://en.wikipedia.org/wiki/Hedonic_treadmill).

      People who's only motivation in life is money are not the people best suited to run something that effects every part of society. I believe I can find better talent and pay them $250,000, and have them do a better job because their motivation is more then money, than someone making 2.5 million dollars. Most people in the world just want to be happy by providing for their family and having access to good education for their kids. And, not to mention how many retired CEO's and such there are who want to give back to the community, who I believe would help guide Bank 99.

      I hope this reply wasn't too long. All though there is much more to it I wanted to give you a little bit of the thought process behind it.
  • Apr 13 2014: If no savings or no borrowings then no local services. Britain is a Bank 99 but when there's no savings or borrowings it can print money to pay for local services.
    • Apr 13 2014: Thank you for your comment.

      "no savings or no borrowings"- I have no idea how you came to that conclusion? Bank 99 works like a regular bank only the profit is being repurposed.

      I'm not sure where you are so I don't know how it works there, but in my town local services are handled by the local government. Bank 99 is not taking over anything. It is just providing supplementary income to the community.
      • Apr 13 2014: A bank can only lend as much as is saved. A bank can only profit by lending.
        • Apr 13 2014: That is not true. Even if it was, BANK 99 would still work, so i'm not sure what the issue is?

          From wikipedia,"Fractional-reserve banking is the practice whereby a bank holds reserves in an amount equal to only a portion of the amount of its customers' deposits to satisfy potential demands for withdrawals. Reserves are held at the bank as currency, or as deposits reflected in the bank's accounts at the central bank. Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow to a multiple (called the money multiplier) of the underlying reserves of base money originally created by the central bank."
      • Apr 13 2014: The for-profit banks would conspire against a non-profit. A non-profit would have higher interest rates and volunteer, free labour to it's advantage and can always lower it's contribution to the community. The central bank and government may even legislate against a non-profit for the same reason that we can't borrow and save directly with a central bank - the middle men have to have their "license to print money" too!
        • Apr 13 2014: This is a BUSINESS. It is NOT a charity or a non-profit. This is capitalism in its purest form. I'm simply giving the consumer a better deal like Redbox and Netflix did. There are no volunteers. Please read the description again. This bank would be chartered like any other bank, or if I can get enough money I will simply buy a local bank and make the necessary changes to turn it into BANK 99.

          Please don't worry about what other banks will do or "conspire" to do.
      • Apr 13 2014: As a business it would have to compete. The best way to compete and contribute to the community would be to use profits to have the highest interest rates for local savers and lowest interest rates for local borrowers instead of for community projects which the bank and all it's employees would be contributing to anyway by paying local taxes to the local government. This is an exploratory assertion and I expect a counter-assertion.
        • Apr 14 2014: (1of2)
          A business attracts consumers in many ways and banking is no different. Interest rates are only a part of it, and in fact, a small part of it. Most consumers choose where to bank based on a multitude of different factors, such as location and other services offered, and customer service level.

          In my town there are about 7 different banks. And, as far as I know, the interest rate in between them has never varied more than 1%. In fact, most bank interest rates only vary by a fraction of a percentage point. I encourage you to visit all the banks around you and find out what the differences between them are.

          I have been researching this project for a few years. Last year I came across a bank manager who DARED me to find a different interest rate given by any other bank in my town. They were all the same!

          What you are asserting is like saying only the price of goods matters, when in fact there are many other factors, such as quality and design.

          Among attorneys, accounting professors, marketing professors, bank managers and others, I also spoke to a finance professor who used to work for the federal reserve. I have come across much information but I think this link below will help you understand better. I can't vouch for this company as it is in Athens, Greece and not local to me. They contacted me several months ago because they have been doing what I am proposing with their web hosting company for the last a few years.

          http://www.philanthropy.gr

          You will need to translate the page, but I have been speaking to the owner and he has explained how he has been operating.
        • Apr 14 2014: (2of2)
          With BANK 99, our employees are paying taxes, the bank itself is paying taxes and still contributing to the community. The difference is that after all the O&M costs, majority of the profit, instead of it going to share holders goes into to the community; the very community off of whose hard work that profit was earned. More money will circulate.

          There are small towns with only one bank. They have no other options for banking. They don't have enough people to get big government grants like more populated cities do. From the FDIC website, which one bank manager helped me navigate, I found out that in a small town of a few hundred people the bank was making a $900,000 profit. Imagine what that money can do for that town.

          As you said, "The best way to compete and contribute to the community would be to use profits to have the highest interest rates for local savers and lowest interest rates for local borrowers." You can't give away higher interest rates than you are charging, as there would be no profit. That is not how banking works. Bank 99 will have competitive rates with other banks; it will just be another banking option for anyone in the community.
  • Apr 12 2014: I don't care how you structure it, if you charge interest, you are destroying the community.

    How banks work. They lend money, thus inventing it into existence. They ever invent the interest due into existence, so they have to lend more and more to create more and more debt-based currency. It takes a while, but the time comes when there is not enough money in circulation to pay the interest due.

    Better to give up money altogether, or, if you INSIST on having a bank, to lend it interest free. The global fiscal paradigm is on the brink of collapse. Start thinking outside of the box. There are better ways to help communities than establishing a fiscal paradigm that pits people against people and establishes political hierarchies based on wealth.
    • Apr 12 2014: Thank you for your comment.

      First of all, I am very aware of how banking works at all levels. I am aware of how our currency system works and it's history.

      I don't think you have taken the time to think through this idea and how it fits into society as a whole. No part of society, including banking, operates in a vacuum. Everything is interconnected to each other, especially now days with the global economy the way it is.

      You can't go around saying it is 'better to give up money altogether'- because of where we are as people, as humanity, and as a society, it would throw us into chaos. We have come too far to go to the gold standard or any others from the past. We need to think about the future.

      When we want to make a positive change, we need to think of ideas that can be done realistically, ideas that have real value in the real world.

      Yes, this bank will charge interest because thats how banking works, but that interest is going back into the community and all account holders get a say in how it is used.

      You have made a false statement saying,"I don't care how you structure it, if you charge interest, you are destroying the community." Because this model of banking is BUILDING the community. Its letting people work for their own good and the good of the community.

      This idea does not force anyone to do anything or change their ways. It doesn't force the government to change anything or individuals to "move" to a new system. It is a result based idea that like minded people can come together for. Maybe it is not for you.

      This is only the beginning and not the end result. You have to plant the seed before you can reap the fruit and I believe this is a good seed.