Cooperative Banks, established under the charter of the Commonwealth of Massachusetts, are financial institutions born from the initiative of prominent local citizens. Recognizing the need for community-focused banking services, these banks were founded with the express purpose of serving the financial interests of all residents. This fundamental principle, prioritizing depositor benefit over external shareholders, remains the cornerstone of their operation to this day.
Greenfield Cooperative Bank (“GCB”) was founded in 1905 by a group of community leaders. Their goal was simple, to provide a safe, convenient place for people to save money for their future and for the bank to pay a fair rate of interest on those savings. You could get a loan, but only if you first opened a deposit account as well. At the end of 1905, the bank had grown to $2,800.00 in assets, with 127 deposit and 3 loan customers. The bank had 4 employees and 5 directors.
118 years later, Greenfield Cooperative Bank has grown to 10 locations (1 bank under the Greenfield Cooperative Bank name and its Northampton Cooperative division), with 100+ employees and 12 directors. We have over 19,000 customers here in Franklin, Hampshire counties and portions of Hampden county. We pay competitive rates on deposits and have great rates on mortgage and commercial loans.
How does a cooperative bank differ from savings banks and national banks?
Historically, cooperative banks were much like credit unions, in that its depositors elected the directors each year. Savings banks had a board of trustees elected by a group of depositors called “Corporators”. Both Cooperative Banks and Savings banks were state-chartered and were mutual organizations (no stockholders). Both types of banks could open savings accounts (but not checking accounts) and could make home loans (but not commercial loans). National banks were chartered by the Federal government, and could open checking accounts (but not savings accounts) and make commercial loans (but not home loans). National banks also were stockholder owned banks.
In the 1970’s, 1980’s and most recently in 2014, the banking laws in Massachusetts were modernized to reflect the changes in banking and the rise of electronic and mobile banking. Today, all types of banks can make home mortgages, personal loans, and commercial loans. Similarly, all types of banks can open savings and money market accounts, checking accounts and term deposit certificate accounts.
The remaining “difference” today is that national banks are exclusively stockholder owned and have to meet the quarter to quarter results on stock price, so their primary audience is their stockholders. Cooperative banks and savings banks are generally still “mutual”, that is no stockholders and run for the benefit of their depositors. But some savings banks and some cooperative banks have since converted to stockholder owned banks
Why is Greenfield Cooperative Bank better than other banks?
Greenfield Cooperative Bank is a mutual bank today and plans to stay mutual for the future. So our focus remains on doing the best we can for our customers. We can look at the long term health of the bank, not simply quarter to quarter.
At GCB, you can get any deposit, loan, financial services or products such as online banking with online bill pay and mobile banking. We have a convenient app for mobile banking with many exciting features to help you do your daily banking and bill paying. Plus, you still get our network of local people, local offices, debit card and ATM’s.
At GCB, we provide fast, local decisions and give you face to face service that only a community bank can provide. When you call us on the phone, you still get a human being, not a computer.
There is one other big difference: At GCB your deposit accounts are fully insured. As a member of both the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF), GCB provides you with full insurance on all your deposits and accrued interest at our bank without limit or exception. Each depositor is insured by the FDIC to at least $250,000. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund.
Are there any other differences between a Cooperative Bank and other banks?
At a mutual bank holding company like Greenfield Bancorp, MHC, the parent to Greenfield Cooperative Bank, we are governed by a 11- person Board of Director that meets each month. Directors are elected for staggered 3 year terms and have a fiduciary duty to select and oversee management of the bank.
The Directors of the bank and holding company are elected by a Board of Corporators. The Corporators is a fairly large board (at least 25 members, currently there are 50 corporators) made up of community leaders whose primary job is to represent the interests of our depositors. To be elected to be a Corporator, you must be a depositor of the bank and nominated by other Corporators and be voted in at our annual meeting. Corporators have 10 year terms to allow them to see the long term view.
Finally, in a cooperative bank (unlike National banks or Savings banks), the depositors retain the ultimate vote, namely depositors must give approval before any co-operative bank (and/or related holding company) can convert to stock ownership. Since our intention is to never go stock (and as such cannot be bought out by other stock banks), this ability for a depositor vote should ensure that future generations of GCB management keep us as a co-operative bank for a good long time into the future.