Move Your Money to a Local Bank: A New Trend
When I had trouble with my Chase checking account several months ago and decided it was time to move my money to a local bank, I had no idea I was part of a big movement. But a couple of weeks ago, I noticed my website was getting a lot of hits from people searching for MoveYourBank.info. Being the curious person that I am, I decided to check the site out.
It turns out the site, which is officially MoveYourMoney.info (moveyourbank.info redirects to the Move Your Money site), is part of a grass roots effort to encourage people to move their money from big Wall Street Banks to smaller community banks. According to the site’s about page, the idea for the movement got started right before Christmas.
JUST BEFORE CHRISTMAS, a few friends were having dinner wondering what personal actions they could take to help limit the power of the big banks and create a more sane, stable financial system. How, they wondered, could they help end the era of Too Big To Fail? The financier at the table recommended that everyone could move their money out of the Wall Street banks and into community banks. Community banks are typically more conservative about how they manage their money, they’re more closely connected to the people and businesses who live near them, and they’re more inclined to make loans they know will get paid back. In other words, they have the values that more people would want banks to have.
Having recently moved my money from Chase to a local community bank, I couldn’t agree more. There are advantages to keeping your money at a local bank.
Local Banks Look at Your Unique Situation, Instead of Applying Across the Board Standards
My biggest frustration in dealing with Chase is that there seemed to be no room to treat each customer as an individual. I was customer for 14 years with an impeccable record. Yet when my mortgage company bounced a check to me, causing my account to be overdrawn, the people at Chase were bound by the bank rules and had to charge me over $200 in overdraft fees, despite the unusual circumstance.
Over and over again I was told, “Those are the rules. There’s nothing more I can do.” Fortunately I managed to get the email address of someone way up the line, who was eventually able to reverse all the fees. It took several days and many hours on the phone, though.
When I moved my money to South Valley Bank and Trust, a local bank, the first thing I asked was how overdrafts were handled. I was told they process all transactions manually, and if your account is about to go into the red, they call you and give you a chance to bring in a deposit. How’s that for service?
Local Banks are Quick to Resolve Problems
I already mentioned my frustration with the amount of time it took Chase to resolve my problem. That’s not unusual with a big bank. To see further examples, one only need look at the comments on my post about the Taylor, Bean, & Whitaker mortgage fiasco.
Many of the old Taylor, Bean, & Whitaker mortgages were transferred to Bank of America after TBW declared bankruptcy. Some of the transfers went smoothly, including mine. Some however, didn’t transfer well at all.
An anonymous commenter wrote the following:
Well, my boat finally sank. I made two payments to TBW in July and August. The checks cleared but they did not post it to my account. I never received an answer as to where the funds went to. As soon as my account was transferred to Bank of America they were too eager to foreclose on my ‘two missed’ payments. I explained the situation and had proof that TBW took my money but Bank of America wanted their money too. After making an additional 2 months worth of payments, plus late fees(which they had promised not to charge), plus one year’s insurance and taxes(which are in escrow account) I can’t do it. I tried to hold on for as long as possible, but it’s too much out-of-pocket costs. Now they are charging me $25 per day late fee(amounting to $750/month) in addition to my monthly payment for the TBW payments they claimed were late. I’ve tried finding a lawyer to help but no one will touch it because I can’t afford a $10,000 retainer and they don’t want to go up against the FDIC or TBW. I hope it works out better for the rest of you. I prayed for help every day, maybe it will help someone else. As for me, I’ve lost everything I own because of Taylor Bean. Good luck to the rest of you.
I can’t help but think if the bank that took over the account were a smaller bank with more personal service, this situation may have had a better ending.
That’s not the only bad Bank of America story I’ve heard recently. Allegedly, Bank of America foreclosed on the wrong house, costing a New Bedford, MA couple damage to their vacation home, loss of a renter, and a huge headache.
I realize that no bank, big or small, is immune to mistakes, though that’s a pretty big one. However, I wonder if a mistake like that would have been taken care of more quickly at a smaller bank, where it’s easier to get in touch with someone who can actually help you.
My mom’s experience in dealing with a local bank is that they resolve problems quickly. She had a situation where her employer deposited money into her account that they shouldn’t have. She unwisely, but for the right reasons, transferred the money to her savings account for safekeeping, while she tried to find out from her manager what had happened. In the meanwhile, her employer reversed the transaction, causing her account to become overdrawn.
Within 5 minutes of talking to her bank manager, all of her overdraft fees were reversed, and she didn’t have to pay a dime in fees. Moving the money to her savings account wasn’t the wisest decision, but she was a longtime customer, and the bank apparently felt that good customer service was more important than making a couple hundred dollars in overdraft fees.
Both Types of Banks Will Serve You Well…Until There’s a Problem
The bottom line is that both big banks and local banks will serve you well under ordinary circumstances. After all, I was a happy Washington Mutual/Chase customer for 14 years, and that’s a long time.
The difference between the two types of banks becomes clear when there’s a problem. That’s when local banks win, hands down. Logistically, it’s just a lot more difficult to cut through the red tape of a big bank to reach a resolution, than it is to contact someone at a local bank that can help you get the answers you need. Unfortunately, it’s often when you’re having problems that the stress level is high and you don’t have the time, money, or energy to deal with hours on the phone, trying to reach someone who can help you.
For that reason, I’m totally on board with the movement to move your money to a local bank or credit union. I’m glad I moved my money, and I’ll never go back to a big bank.
Photo by Photos8.com.
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By Lynnae McCoy, on Jan 26, 2010
I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.
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We moved away from Bank of America to ING Direct a few years back and don’t regret it. We have seen an improvement in customer service and have a better picture of our cash flow.
I tried to encourage my mom to switch to ING Direct, but she is uncomfortable with an online bank. We looked together and we found a state credit union that fits her perfectly and has been wonderful working with her.
I love the customer service at our local credit union but I have to say that the rates are pitiful and they don’t offer as many services (for instance, their mortgages are very restrictive). We do our checking through them but keep our savings accounts with ING for the better rates. We’re new to ING so I don’t have an opinion about them yet.
I was having tons of issues with Chase. I closed my account and opened an account at a local back yesterday. Working with a new local bank and ING Direct have been such an amazing experience compared with Chase.
I had to file a complete before the local Chase branch would call me back like they said they would. Once the branch manager called me it was too late to make up for the 2 months of failures from the other staff.
I have had the same checking account with a local credit union since I was 16 years old…and I just turned 40…yikes. We also have our mortgage through them.
Our business accounts are also with a local bank. We know the manager and have always had great service.
I have never had any problem with either bank, but I don’t know if that’s b/c they are local or just good banks.
Our savings is with ING, b/c unfortunately the other two can’t beat Ing’s interest even if it is piddly.
My local community bank was absolutely amazing after my checkbook was stolen. Absolutely ever fee was reversed and all of the money that was stolen was deposited back. They filed my police report, opened my new account, handled signatures via fax, and what could have been a horrible situation was neatly resolved. At the end of the process, they packaged all of my paperwork from the police report to the new account paperwork and mailed it to me. The kicker on the whole situation is that everything was resolved QUICKLY. It wasn’t more than a week before the situation was open and closed. There’s no way a national bank would have been so helpful and efficient. It is for this reason that I hope to never have to change my banking.
I loved the local bank I used until I moved but my dad’s local credit union was terrible. He had a brain tumor that developed quickly and was unable to handle his finances with a few months of diagnosis. I started handling everything for him and everything was going fine until one month they put his credit card payment towards his car. Thinking that it wasn’t the end of the world to have the extra money paid on the car I just paid the card off again. A few days later we got a letter saying his card was delinquent, they had applied his payment to the car loan again. When I called they wouldn’t even listen to what I had to say even though it was completely obvious what had happened and I was not asking for any of his money back. They asked to speak to him and when I told them that he was unable to talk on the phone they just said sorry can’t help you. It took a week and a power of attorney but I finally reached someone who sounded like it wouldn’t have been that big of a deal to transfer just enough to pay the card off from the car loan in the first place.
I’m not saying all credit unions or local banks are good or bad but I would definitely advise talking to the people at the call center and/or the bank before you pick which local bank you want.
I’d also go ahead and advise that you have powers of attorney on file with all of your accounts because my dad was only 50. He expected to live for a good while and I never expected to be dealing with things like that for him at 22.
Several years ago we moved to a new state. The only convenient bank was a BofA. We signed up for an account, transferred money and less than a week later we wanted some cash. Stopping at the ATM machine (at the bank) we canceled the transaction when it noted we would incur a $1.50 charge. We promptly walked inside. We were then told there would be a $2 charge to deal with at clerk! So I politely asked to withdrawal our money, ALL OF IT! It was worth the $2!
I too have been with my local bank since i was a small child. I know the people that work in the office, and they know me, my children and my parents. If i call on the phone, they recognize my voice and i know theirs. I stayed with them even when i lived an hour away. With online banking, direct deposit and SUM banks, it was never a problem
When my husband and i married he used BofA and had numerous issues that, like you, took MONTHS of phones calls and work to fix and we nearly lost our house because of an account getting hacked and mortgage payments not going through!
We will NEVER use a big bank again and even my husband has transferred EVERYTHING to the small local bank now.
When we were first married we had an account at Commerce but they loved to charge us fees and were hard to deal with. We’ve been with local banks and credit unions ever since and had no complaints.
I love the personal service we get from our credit union.
Have you seen the Michael Moore documentary “Capitalism”? This film plus several run-ins with bank officials got me mad enough at Bank of America to gradually pull my money out (took a few months to transfer all the online bill pay accounts). Now we’re at a local credit union where everything is dealt with courteously and quickly.
No big banks ever again!
Now, I’m working to pay off my mortgage early with Wells Fargo (another of the big 6 banks mentioned in the film) to get away from them, too.
I used a local credit union for years and was always pleased with the service I received. When I got married last year I moved over to USAA. So far I love how they have used technology to make banking super convenient. Like depositing checks from my iphone! I can’t speak to their customer service yet but they are national so I am hoping it is as good as my credit union was.
I use several banks. BofA, ING and FNBO. BofA does screwy stuff from time to time but I have never had an issue getting the problems fixed. I don’t know about you but if you travel a lot and need access to an ATM. BofA has one everywhere and there is no fee to withdrawal from a BofA ATM if you bank there. Free ATM withdrawal can’t be beat for my money. I used to work at a Community Bank and it is great to have accounts there but I prefer to spread my money around and use banks for different reasons other than customer service. Not to mention, a bank makes its money off of people who bounce checks and overdraft. You are using their money for a short period of time. You should be charged for it.
BofA plugs its online setup as just in time, so that you can actually see all your records via cel phone or computer, but actually are days behind in processing. When you get dinged with a $35 charge weeks after you think it cleared, they chide you for not using a check register. Maybe they should own up to the fact that either their online system is being marketed in a fraudulent way, or that they are using folks who can least afford it as a profit center.
We recently moved from Wachovia(Wellfargo) to Fifth Third Bank and the experience has been wonderful. I feel like I am banking with a local community bank. Fifth Third as I had researched is 150 year old bank out of Ohio. The came into the Georgia Market a couple of years ago and have several offices in standalone buildings and inside Kroger. I was initially drawn to them due to convenience of being right in my neighborhood grocery store. As time has passed I have set up my direct deposit and online banking so I don’t have to actually visit the bank. But, the ladies at the Powder Springs office always remember me and my wife.
It has been a truly positive experience for me and my family