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Big mega bank like Wells Fargo aka Wachovia
Small credit union that refuses Federal Reserve infusion
Accepting this "free" money from the Fed comes at a high cost. 5% dividend, followed by 9% after 1st year. The big banks will hoard the money, not principally lend it out to Americans for mortgages/car/etc and instead channel it into commodities, foreign equities, etc. The smaller/medium banks receiving these funds will likely lend it out and lose a substantial amount of money as a result of the coupon paid to the Fed in addition to an escalating amount of defaults servicing bad debt. These medium banks will likely be liquidated as a result, causing you much headache filing an FDIC claim and waiting for your money. SunTrust, assuming they've accepted a deal with the devil, is an example of such a bank.
A small credit union that refuses to be swallowed up and can fight off the big boys will only lend to trustworthy people with established relationships, a win-win proposition. These small banks will remain profitable, but might be the target of a forced merger into a bank like Citi which is bleeding red.
I know this reply is broad scoped (Business related), but it applies to your local institution as well.
I think a credit union is one's safest bet these days. Credit unions have fewer fees, they don't get involved in the risky side of the business, and funds are fully insured. Their service is tops.
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