The Family Bank idea is to teach families how to organize themselves into being a bank for the immediate and extended family.  Formed as a non-profit, the Family Bank would:

1-Assess family members small payments of five dollars a month in exchange for the right to borrow up to 300 dollars in a revolving loan fund.

2-Participate in a savings fund for the children and the elderly and for family emergencies.

3-Participate in a investment program for the family

4-Being an non-profit, the Bank could solicit grants and tax-free donations and ultimately start to help other families initiate Family Banks as well.

I did this in Berkeley years ago and that worked very well, eventually families accumulated money to provide security for family members in as little as three years while taking care of immediate needs.

No family member should be living isolated, poor, with no security. A Family Bank can help, especially if many such banks are organized. Family Banks often traded services eliminating the need for money between them.
For example, Time Banking, exchanging services for items bank members would ordinarily pay cash for. We exchange services with no cash, I baby sit your kids for you and you teach my son guitar.
In the Methodist church we established a "Finder's Club" where we find individuals for individuals for specific items for free or for a small fee.

Again, as an example we found elder care for  a parent living in a distant city. It cost 50 dollars a month to look  in upon them with a person living in that city, who made sure they were ok and took their meds, looking in on them regularly.

Thus a family bank has several services it can perform for family members. 

Details:

Any given family member, with some resources, can start a  bank with as little as 200 dollars.
All profits go to fund family projects. In Berkeley, each family of any size sub-divided the work into sub-committtees to reduce time allotments.

Now with the internet, banking transactions among family members could be handled on a Family Bank website, or an existing one utilizing Pay Pal.

Much easier to do these days.

For a video on the idea click on the link below:
http://www.youtube.com/watch?v=5t5mlP0bjVQ

 
Here is more detail on how the FB would work:

It can be entirely an on line operation. There are many on-line banks in operation already. Don't need an office or advertising, just a way to deposit and transfer loan monies from or to an account for savings.

First an individual, like me for example, a Dad deposits money, in this case, say 5k dollars to an account which lives on my web site.

Individual B, say my daughter or son needs to quickly borrow 300 dollars. They can borrow the money however, only after joining the family bank paying say 10 or 15 dollars a month, that is deposting it (say via paypal) or from their own bank in the Family Bank account having their name.

Once a member they become eligible for loans say after three payments or a total of 30 dollars.

They go to the web site, request the loan, and then the money, after approval, is transfered to their account at the Family Bank to their own bank or they could use the money to pay bills right there on the FB web site.

The money could be paid back on a flexible schedule but it must be paid back in order for the individual to be eligible for a new loan.

So with 30 family members the FB has 60 plus 1,800 dollars on day one when it opens up on line plus 
Dad's 500 to start the account.

The interest rate on loans is no interest, or a maximum of three percent.

The profits go back into the FB.

Now the money the FB has can really grow quickly under the following scenarios:

Donations and grant money can be solicited, in connection with helping other families set up a similar FB.

I, or a family member, rather than deposit my paychecks into Wells Fargo fargo deposit into the FB.bank number two, would deposit my paycheck into the FB. If several family members do this the FB could open with 10 or 15k in the accounts useable for short term loans and emergencies.

Say that adds 5,000 extra dollars a month to the FB, money now available for loans.
The FB in the first example will have in one to three months over ten thousand available for loans, or the money could be put into a family investment account, or to help the poor in the family or whatever.

How do I pay my bills if the money is not in Wells Fargo Bank? The same way you do it now by transfering the funds online to your vendor on line.

If you don't want that hassle, this need could be a job for a family member, a stay at home mom, a job for a small fee could see that bills got paid. People don't know it but Visa and Master card will issue cards to individuals and organizations, not just to banks.

(Trust is a factor here, of course, and some family members might not be entrusted with the family finances.)

What if a borrower doesn't pay the loan back? Well then no more loans are issued until the money is paid back.

Emergency loans, funerals and such could be handled differently.

 Other supports Job leads, borrowing cars, adding a family member to insurance policies are ways of relating that save family members money and constitute a gigantic self help organization.

Family members would have to agree to serve on various family committees helping to make decisions on the various financial projects identified above.

Who needs money for college, how can the FB help?

The advantage of the FB is that the family instead of putting thousands of dollars each month into wall street banks who then use our own money against us , we put the money into our own family banks and use that money for our own benefit and cut out the profit wall street banks take from us. This is thousands of dollars each year in interest we pay to banks who give us nothing in return.

We regain control of our own lives and our own money. And did I mention that if a castrophe hits like flood, earthquake and such, groups of family banks can make the difference helping each other with loans and support, housing and such without waiting for FEMA to show up.

And if enough families did this, say 100,000 families we could also bring wall street down and effect real change in this country. There is nothing that terrifies a banker more than the threat to take our money from their bank.

Moreover, in the case of something like the down payment on a house, the kids save thousands of dollar paid out to banks in interest, have a much lower mortgage which they pay to the FB not wall street.

There is a Family Bank Board of Directors, whereby the kids can take over the bank and some can get a real paying job handling the bank, as the non-profit, or in the foundation side of things and thereby the families future is much more secure.

That is a quick summary of how it can work.

For a real education of how commerical and wall street banks really work to profit from taking your money click on the link below.

Also see my blog on this site "Wall Street, the Banks, The Government"

http://www.youtube.com/watch?v=ArfPytAoeZ0&feature=related

Those interested in learning more can message me on this site or at my website: 

www.lonniehicks.com