Banking System
A NewVistas community banking system consists of three of the Human & Financial Capital Department’s 12 agencies, which work together as the Capital Bank, the Community Bank, and the Commercial Bank.
Rather than pooling money and dividing it among participants with little accountability on their part, a community’s banking system leverages participants’ combined capital by a factor of 10 or more, creating new money to build the community campus, lease space and equipment to participants, and make business loans to participants. Profits from these activities equally benefit all community members.
Bankks make loans through the fractional reserve model, so that they only need a small portion of deposits to back loans, mostly 10% in today’s banking. therefore, a bank with 1,000 in deposits can potentially make loans of 10,000. If it does so, it automatically creates deposits, meaning the process can go on endlessly. Bankks are held back by regulations and risk considerations.
Capital Bank
A community’s capital bank receives investments from all participants and pays them a 12% dividend. The capital bank uses these investments to capitalize the community bank, commercial bank, and additional 21 agencies as needed. All these agencies pay 15% interest on capital they use, which enables the capital bank to pay the 12% dividend to investors and cover other costs, including services from other agencies such as audits and legal services.
Community Bank
The community bank is where community participants maintain their personal checking and savings accounts. In addition, the community bank gives loans an interest to community agencies and mature participant businesses for things like tooling and fixtures, leasehold improvements, work in progress, finished inventory, and accounts receivable.
Commercial Bank
The Commercial Bank Agency is the ninth agency in the community. The agency supports participants’ access to the tools of trade needed to run successful businesses, facilitating inventory and accounts receivable factoring, and acquisition of equipment.
The agency is so named because the primary target of its services is commercial enterprise, as opposed to the Community Bank, (agency 7), which provides personal banking services to participants.