That’s true. So the question to ask, as with most campaigns, is this: does the marketing comport to reality?

In the case of DanversBank, the answer is a qualified yes. It’s a relatively small, local bank that’s expanded rapidly during the current downturn. It’s been able to do so because it avoided exploitative subprime loans, didn’t hold FM bonds as capital, and has remained profitable. Its loan volume is up 6.2% in the first six months of the year, which is a huge bonus for local businesses at a time when most banks have severely curtailed lending. Those loans are mostly funded through its own cash flow, allowing it to extend credit even as the capital markets have remained mostly frozen. It has the standard charitable foundations, which doesn’t distinguish it from other financial institutions but is better than not having them, but it does a better job than the national banks of focusing its grants on small, local organizations in small amounts.

So, yeah, it really does do good things for the community when a relatively small bank opens a branch, to compete with the innumerable Bank of America branches in the area.

The caveat is that until January of 2008, DanversBank was a cooperative. In many ways, that’s a superior model for the interests of its members/customers. Its de-mutualization entailed spinning off another charitable foundation, which hardly compensates for the longterm loss. But if it hadn’t managed to float a public offering before the market collapsed, it would’be been poorly positioned to expand, as it has, to fill the void in local markets left by the irresponsible national financial institutions. An irony of capitalism, if you like – customers in much of the eastern part of the state, including Waltham, are better served for having DanversBank expand into their markets, but the old customer base couldn’t have financed such an expansion as members of a cooperative, and lost a 150-year-old financial institution.

You’re just noticing a well-executed money grab because it targets you instead of someone else.

Please bring this ad to our Capitalism class tmrw! I am sure Prof. Gaskins will love it!