"I basically figured if Congress wasn't going to take action to reduce the size of banks or at least regulate the activities they were involved in, I'd remove my part of the money they [Bank of America] controlled," Collins said.
The general public anger over taxpayer bailouts and big bonuses for bankers is one reason. There's also growing resentment about how many big banks are nickel-and-diming customers in tough economic times.
The article goes on to say that smaller banks are also luring customers away from the bigger banks with attractive rates that the bigger banks can't match. Although the impact isn't very large since consumer deposits make up only a fraction of the bank's overall deposit base. Businesses are where the real money is and even those are starting to consider making a switch.
Two months ago, John Andersen said he became so fed up with some of the practices of the big banks that he decided to close the KeyBank checking account he used for his Portland, Ore.-based carpet cleaning business The Lindey Company.
I think that if more people were to switch to local banks, local economies would be better off. It's just another way of supporting local businesses. These types of banks are trying to gain customers so the attractive rates and no fees are beneficial for both parties. At big banks, they have the market power to make you pay the hidden fees since most people won't do anything about it. If local businesses also switched to local banks the larger banks would have to take notice and possibly start offering better rates as well.
Do you think switching banks is a viable way to reduce the size of banks or regulate the activities they are involved in? If not, what is another alternative to switching banks that would allow your voice to be heard by larger banks?
Full article available at
http://money.cnn.com/2010/02/10/news/companies/banks_consumers_switch/index.htm
I think that this is an excellect idea. The ideal economy is consumer driven. If big banks are not offering good service then we should look for services elsewhere. That is the fundamental principle of capitalism. The real concern I have is rather local banks are doing any better. The finacial marketplace is so interconected that small banks are forced to go along with the desitions of the larger banks sometimes.
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In principle I think this is fantastic and I fully support in. In practice, though, I don't really see it panning out. This isn't as simple as not drinking Coke products, or looking for sweatshop-free clothing. Opening bank accounts is a hassle and takes research if you do it right. I just don't see enough people, businesses especially, will close their accounts to make a huge difference. I hope it does, though.
ReplyDeleteThis makes total sense! Most people would never really think about this to begin with. I know that when our bank went out of business and was taken over by Chase, the customer service and rules were not good at all. There was definitely a negative difference just in the customer service part of the big banking vs. the local banks. I also really appreciated the relationship and personalized part of my local bank. So, not only is it good to switch banks to make a statement, but you get a better banking experience and support your community.
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I think it is a good idea. If the local banks can offer better service or the attractive rates, then, they will have more and more customers which switching their accounts from large banks, it will bring the local economy better off. Local business will get more benefits from it. A
ReplyDeleteThis switch shouldn't be unexpected. The government needs to reel in the big banks and set some standards. The local banks will also reap the benefits of this switch because they will accumulate more capital to spread around the community, plus the service will most likely be better. Furthermore, the government has the right to set these new standards because they got bailed out, and besides, if the leader of the free world makes about 400k-500k dollars a year, then why should bankers get more?
ReplyDeleteThis sounds like a great idea, however I'm not sure how many people will do it. As Ethan said, there is a lot of hassle that comes with switching banks, and unless people are in serious trouble, I'm not sure they will want to go through all that hassle.
ReplyDeleteIf small banks are offering more alluring rates and no hidden fees that satisfy the needs of the people then all I can say is more power to everyone who switches. I do agree that it will help build local banks ultimately helping the entire community. But on the other hand if you decide to move to another state where your bank doesn't exist that means that you would have to go through the hassle of switching to another one.
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