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ALSO SEE HOW A UNIFIED FIELD BANK COMPARES TO CONVENTIONAL BANKS
1. Is UFB a micro lending bank?
UFB branches will be full service community partnership commercial and investment banks. Micro lending is best done with as little intermediary presence as possible. UFBs will make education about micro lending and how to start community ML initiatives available and will find ways to include micro lending as a bank sponsored service where requested by each community.
2. Is UFB a brick and mortar bank?
Yes, UFB branches will be present in their communities as brick and mortar but more than we are used to in a bank. UFB branches will also be a sustainable community lifestyle, technology, education and wellness centers as customized by each community’s appetites and needs.
3. Does UFB offer checking and savings products?
Yes but again, these products will have very important differences from what we are all used to. The details of how we can offer these products in a more transparent and mutually empowering way, while still being secure and legally compliant are being worked out now.
4. Will UFBs be FDIC insured?
Yes, and we are also working on a backup underwriting system that will compliment and assist the FDIC in being able to cover deposits at our branches.
5. What other forms of insurance is UFB exploring to protect depositor assets?
There are several ingredients to a long term secure and comprehensive deposit insurance picture, and UFB is exploring some of these as potential short and more long term solutions.
That’s the short answer. Here’s a more complete one:
Backing up a portion of UFB depositor assets with other assets is the typical strategy. The FDIC uses digital dollar credits on its balance sheet for instance. At other times in the past banks have used gold to back its cash assets operation. Insurance is one vehicle that leverages premium dollars paid in to build up an asset base that can be used to insure loss. However, it is based on the need to leverage currency beyond what is being held by the bank, and the assumption that we need to insure against one or both of two unfortunate events: 1) either the bank misuses its funds and becomes insolvent or 2) the public looses trust in the bank and wants to take all the money out. In either case or both, the bank runs out of money, and without help, cannot honor all the withdrawel requests. As we are able to demonstrate a more sustainable banking model, we expect both these potential problems to disappear, leaving less need for insurance.
Solving the problems inherent in the basic way banks have operated for the past several hundred years is the way to most thoroughly protect depositor assets. We call this "EN-surance" and so while a part of our focus will be to participate in short term solutions like FDIC and other complementary forms of transitional insurance we are working on now, our core creative focus will be on mainstreaming the UFB model so that communities enjoy an unprecedented level of transparency and can participate as partners with the bank in ensuring that both the community and the bank are sound and prosperous for the long term.
6. How does UFB work with loan collateral?
UFB will bring the concept of collateral into each loan application and approval, however we will be valuing not just a discounted appraisal of assets owned by the borrower that we feel we could sell quickly if the loan fails to pay, but many other forms of value that are real in the lives of the borrower such as reputation, experience, contributions to others, strength of standing in the community. We feel these are important assets, at least as important as what the Kelly Blue Book says your car is worth.
7. What kind of interest will UFBs charge on loans?
UFBs will charge very competitive rates on loans, which over time, will be much less than is currently being charged. This is possible for two reasons. First, because UFB is directing a portion of investment returns to offset part of the cost of lending, and second, because UFB business support trainings, education and technical support will help our borrowers succeed, which will keep repayment high and allow the interest rate to reflect a lower risk supported by the economic strength of the community.
8. What kind of interest will UFB pay on savings?
UFBs will pay very competitive rates on savings. There is an additional benefit to being a UFB depositor however that will add significantly to the savings interest rate over time. Each UFB depositor will join a pool of operational bank shareholders. Their deposits will be time weighted so that once the bank investments in community infrastructure begin to generate return on investments, that return can be shared with depositors based on not only how much they have in savings but how long they have kept it there. One of the benefits of depositors receiving part of their income as a shareholder of the bank rather than only as interest on savings is that savings interest is taxed as regular income and shareholder dividends are taxed at the much lower capital gains rate. UFB depositors will also be able to participate in directing a portion of additional bank proceeds to local social profit organizations and community grant programs.
9. Who will own local branches of UFB?
UFB branches will be primarily community owned. This will be established within the corporate structure of the bank as well as by license and by charter. Unified Field Corporation (UFC) as the parent company and creator and steward of the UFB model will own a very small percentage of each local branch depending on the role it will play in bank formation and startup as requested by the community. The community will own shares in their local bank through either investing capital in its startup as a Founding Shareholder and/or depositing their savings as part of a group of Operational Shareholders. Operational Shareholders will participate in decisions that direct that portion of bank investment returns back out to the community through some of the educational programming and all of the social profit and granting support of local programs.
10. How will UFB branches be capitalized?
UFC is preparing, as part of its sustainable bank formation system, four ways for capital to flow into local bank formation:
(A) Local retirement fund redirection through a national retirement fund management company that has given approval to UFC to receive directed IRA investments and is supportive of allowing UFC to umbrella local bank formation investments.
(B) A National Collective Investment Trust being formed to receive additional smaller private investments from individuals and businesses wishing their regular investment dollars to be used for local bank formation, but who are not currently able to invest larger amounts necessary to purchase Founding Bank Equity directly.
(C) Sale of Founding Shares in the local bank to investors as is currently done.
(D) Where possible, UFC will continue to develop capital resources to add to local community bank startup when such outside support is requested from the community and when UFC can respond.
11. Where is our first bank going to be located?
The need for UFB branches across the country now is urgent, and so the model needs to be distributed and implemented as fast as possible across a variety of types of communities in order that we may demonstrate its strength in different settings. We need examples of UFBs in urban, suburban and rural environments, and in areas of the country with different climates, technical, environmental, economic and social challenges. Because of the need to mainstream the model in this way, UFC will be choosing the first group of communities to enter the bank formation process beginning by Spring 2010. We believe that as the model begins to be more widely known and understood, and especially as it begins to be seen in these various kinds of communities, that we will soon see hundreds of UFB startups all over the country.
12. Will UFB be starting new banks or buying existing banks?
Banks in the U.S. continue to fail at an alarming rate. The UFB community partnership banking model works with depositors and borrowers in a new way, providing a level of true partnership and support never before seen in the industry. As UFB customers succeed, the bank succeeds and the community succeeds. Our model is the best solution to the current banking crisis on all levels. UFB will be working with those existing banks who, for whatever reason, are seeking either to find a partner with whom they can work to succeed in this challenging environment, or to be acquired completely. In either case, the charter, policies and procedures will be completely adapted to the UFB model and the depth of alignment will determine how closely we can work with existing shareholders and management and where we need to work with new people. Existing bank buildings housing our repurposed and restructured bank branches will be greened in meaningful ways. Management willing and able to align with the new model will be trained and supported in doing well with us. The community will be a participant in the transparent process of transformation from the beginning. We welcome contact from those interested in bringing the benefits of the UFB sustainable community partnership bank model to their communities.
13. Why is the bank doing a media project?
There are two primary reasons UFB is creating a media project:
(A) UFB is creating a media project to to tell the story of sustainability. To inspire people and communities everywhere to be a part of the movement to engage in sustainability activities and efforts everyday. By sharing positive stories of people, communities, companies, and organizations already creating sustainability in their lives, we aim to strengthen the demand from more and more people, for more and better ways and means to achieve sustainability in their communities, which can include the structure and support of UFB.
(B) Not only will UFB be a prolific source of personal accounts and community stories, the media project will help UFB optimally realize its 3 pillars – sustainability, transparency and education, through immersive media creativity and innovation that is not typically available to a bank's traditional marketing department.
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