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"The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion."
Actually, it's a smart idea for a number of reasons. The service component is far better at a community bank, the decision making on a loan app is better, etc. etc.
Case in point? About ten years ago, I had been waiting on a client check that was in the low six figures. The client had been stringing me along, and payroll was coming up.
The check arrived and I immediately headed for the bank a few blocks away, one of the country's largest. My business account had been there for several years out of sheer inertia, due to the fact that my now-deceased business partner had done his personal banking there.
Unfortunately, in my haste, I had not gone to the bathroom before leaving. So, I'm standing in the lunchtime rush, tapping my feet, and thinking, "Man, I gotta GO."
So when I got to the front of the line, the teller stamps my six-figure deposit slip and hands it back to me. I ask her, "Can I use your restroom?"
To that, I got the following reply: "Sir, we don't have public restrooms here."
Now, think about that for a second. I just put 140K in their bank, and they can't let me use their bathroom. So I found an elevator, went up to the next floor and did my business.
The next day? I came back in, and closed all two of my three business accounts, only leaving the third open long enough for my outstanding checks to clear. The bank officer never asked me why I was doing it, either. He just filled out the paperwork. I took my money to a community bank immediately afterwards.
I never looked back. The service is way better, the rates are typically better, and there's much higher flexibility in how they structure your business. There's just no comparison between the two.
"The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion."
The big banks (Citi, Chase, etc) don't make much money off of retail banking and their $3 ATM fees. Margins are low. They make their money off of I-Banking fees and Sales / Trading. If you take your money from their branches, they won't care.
The big banks (Citi, Chase, etc) don't make much money off of retail banking and their $3 ATM fees. Margins are low. They make their money off of I-Banking fees and Sales / Trading. If you take your money from their branches, they won't care.
As somebody who does a lot of bank marketing, with a couple of Top Twenties under my belt, I beg to differ. Deposits are the lifeblood of the institution and, particularly under the tighter government scrutiny, determine how much money can be lent. I can't begin to count how many meetings I've sat in with various bank operations guys who have to juggle deposit activity with lending activity. He'll actually have to determine what can be lent based on what the bank's deposit situation is like. So while banks don't make a lot off of retail, ordinary depositors allow those same banks to make a heck of a lot of money off commercial lending, etc. Choke off their deposit stream, and you choke off their ability to make money pretty quickly.
I've never kept my money is a big bank anyways. I've always stuck with the local credit unions who actually care about you and look after you. They have always alerted me if something looks strange and done their best for me.
I know it has always been my plan to move it to a better institution once I stopped moving across state lines so much. The larger banks I do business with have terrible rates and insane customer service. Often I don't need much since I bank online almost entirely, save for some check deposits, notarization and signature guarantee (which is why I need a local location, but only a few times a year).
I think it's funny how my bank likes to tell me how they can serve me better if I put more money into them. Just a regular online savings account still serves up more then 3x the best rates for their high yield/balance savings accounts or CD's (7x for just regular), the CU's can even beat that. Stock accounts the same bank would try and hit me with "service charges", which they did once and I moved it out. They also like to sit on the direct deposit of my paycheck for a week to clear (but they would love to give me a "loan" till it does). They charge money to pay bills online, which is nuts, but it's free to just pull the money from the same account by the biller instead of pushing it from the bank.
Which is the whole reason I don't keep any money in there I don't have to. They see the outflow on their systems which drives them to get my business like a rabid badger every time I go in. So I write down what I get from basic service at the online bank I have accounts with and tell them to beat it and we'll talk, and they walk away.
"The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. "
The big banks (Citi, Chase, etc) don't make much money off of retail banking and their $3 ATM fees. Margins are low. They make their money off of I-Banking fees and Sales / Trading. If you take your money from their branches, they won't care.
If this were actually true none of the big banks would bother offering interest bearing accounts. Of course its not true...
Bank of America has around $1 trillion in deposits, they have around $1.5 assets. Are you seriously suggesting that their $1 trillion in deposits is some how inessential to their operation?
The big banks (Citi, Chase, etc) don't make much money off of retail banking and their $3 ATM fees. Margins are low. They make their money off of I-Banking fees and Sales / Trading. If you take your money from their branches, they won't care.
If your balance is big enough, they'll care. Chase falls all over me to keep my money there.
I also keep my money in a local bank. There are advantages to each sort of bank. The big banks will treat you well if you have a big balance. Otherwise, it's best to stay away from them.
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