I can hardly remember the last time I banked with a financial institution with the word “Bank” in its’ name.
In fact, I believe the last time I banked with a “Bank” was in 1983-1984 with a regional Texas Bank in San Antonio, Texas.
Regarding banks, the big line you now hear about banks is that they are “too big to fail”. Well, that obviously did not apply in the mid 80’s because the bank that I banked with in Texas failed royally.
So what does my personal banking history have to do with what is going on with the Occupy Wall Street protests going on across America? One reason has to do with an article I just read at BoldProgressives.org having to do with finding “Good Guy” smaller banks in your area.
The article strongly recommends that you move your money from the Citigroup’s and the Wells Fargo’s and the Bank of America’s and the JPMorgan’s to one of the smaller independent banks in your area. Near term, this plan sounds good but in the long run it might backfire.
Over the past two decades these four powerhouses of banking have continuously bought out smaller banks across the country or have merged with other large banking corporations. As a matter of fact, when these big boys of banking got bailed out by taxpayers via TARP, courtesy of the White House and Congress, they used a good portion of the taxpayer “donations” to buy out smaller local banks across the country for pennies or dimes on the dollar in an effort to become even larger.
These large banking behemoths made much more money on these buyouts than they could have made by making loans to small business startups or on loans to small businesses desiring to expand.
The unfortunate part of the TARP debacle is that Congress and the White House sat on their laurels while these bailed out banks went bank shopping. I equate what the big banks did to what a wino does when he/she is sitting on a street corner with a sign saying “Can you spare a little money for food” and when someone gives them a few dollars they immediately go buy more liquor.
I am not as aggravated by the big bonuses these banking corporations give out – I am aggravated that we, along with the White House and Congress, gave them tons of money with no strings attached.
I strongly believe that if a banking conglomerate is having financial problems, it should first tighten its’ corporate belts by reducing or eliminating bonuses and also trimming or discontinuing dividend payouts. After those two steps are taken, then and only then they can try to get some government bailout with serious strings attached – otherwise, if it is too big to fail, it should be ALLOWED to fail, no matter how the cards fall and who loses out in the process.
So, lets get back to the “Good Guy” local banks that BoldProgressives thinks that you should move your money into after removing it from your account(s) with one or more of the Big Guys.
I think that some of these Good Guy banks could be problematic because if any of these banks have problems in the near or distant future, they will also be bought out by one of the banking behemoths – and when that happens, you will be in the same pickle all over again.
That reminds me of the classic rock oldie “Will it go round in circles” – your Good Guy bank of choice might not be bought out by your previous banking behemoth but you can be sure it will eventually be bought out by one of the other three behemoths.
So, after all of this, I would like to present an alternative – do a little research on your own and compare the various local Credit Unions in your area. Compare wisely, shop for one with financial strength, branch locations that are convenient to you, and make sure it is on a variety of banking networks that will allow you to use another credit union when your own credit union is not nearby. Many credit unions have agreements where you can make a withdrawal at another credit union without paying a fee to your credit union or the other credit union.
By transferring your accounts from your banking behemoth to a credit union, you are helping to tell the banking behemoths that you do not need them for your financial well being.
By the way, credit unions have various programs throughout the year where they offer special rates on car loans or holiday loans and where they even let their members skip a payment for being a good customer. I personally remember a few years where I skipped a payment near Christmas, at their offer, and it made those holidays a little bit better.
The bottom line is that I strongly recommend removing your accounts from the banking behemoth you are currently using to a credit union at a time when it is most convenient for you.
These behemoths sometimes have restrictions on their customers as to when and if they can close different types of accounts – so, it might be necessary to move your accounts one at a time over a period of time. Some times these behemoths do their best to charge special fees to anyone closing an account but I heard that Congress is looking into that practice.
Will Bank of America and the other behemoths be hurt if a few hundred average Americans close out their accounts? Surely not. But will they be adversely affected when 5, 10, 15, or 20 million average Americans close accounts and move their money to credit unions? You betcha they will.
The truth is that banking behemoths do not want customers that have minimum balances in their checking accounts and small balances in savings or CD’s but they surely want upper middle class Americans that have thousands or tens of thousands or more in their savings accounts, money market accounts, or CD’s.
So, my suggestion is to quickly run away from these banking behemoths – don’t walk away – and you will never regret it. I have always found customer service to be excellent at all credit unions I have been a member of. They sincerely work hard at earning and keeping your business.
One last thing to remember – banks are owned by their shareholders and banks are obliged to their owners first. A bank’s customers matter secondary to shareholders.
On the other side of the coin, credit unions are owned by their members who are also their customers and that is why you will always get better service at a credit union.
Good luck with your decision – and more importantly, if and when you close your account and move it to a credit union, you will never have a reason to look back!