The Experience Of American Community Bank And The Development Path Of China

The third plenary session of eighteenth central committee has adopted “MajorIssues about Comprehensively Deepening the Reform”, which emphasized on thedevelopment of an inclusive financial system. In the last year, the CBRC issued“Notice on the commercial banks to set up community branches”, which marked thedevelopment of community bank in China officially started. To explore the path todevelop community banks in China has theoretical and practical significance.Community banks focus attention on the needs of local families, businesses andfarmers through relationship lending. This paper defines the community banks andsummarizes their characteristics. Based on the relationship lending theory, weanalyze the development of community banks and find out the relationship betweencommunity banks and small enterprises. This paper also uses the community data ofAmerica to conduct empirical analysis. At the end, also introduces the cases of WellsFargo bank and CMBC community service to discuss the way of developingcommunity banks in China.The paper suggests:(1) Community banks conduct small business loans at arelatively lower cost than the large commercial banks. Thus, in the future bankingindustry we can follow the way that the megabanks are emphasized on serving thelarge companies, while the small community banks specialize in providing smallbusiness loans. We can reduce the social cost in that way.(2) The relationshipbetween community banks and small enterprises can be mutual-beneficial, ourcommunity banks must find a way to keep close contact with local customers.(3) Toopen more new community banks or to reform the existing banks are the twodifferent ways we have to choose. Ether of them have their own advantages,however, this paper believe that to change the city commercial banks intocommunity banks is a good choice. In addition, we can improve our regulations bylearning from other countries and build self-regulatory organization of communitybanks.