Some Americans are fed up with the big banks. They are withdrawing their funds and placing them in regional or local banks.
They have several reasons. One is new fees. The old standbye, poor customer service, is also invoked.
The defection rate for large and medsized banks in 2011 was a little over 10%. That’s high. No business wants to lose 10% of its customers.
In 2010, the rate was over 7% but under 10%. So, the exodus is accelerating.
Of course, the bigger issue is which customers. Large banks don’t care about customers whose accounts are not in the top 20%. The figures do not tell us this.
What about small local banks and credit union? The loss was under 1%. This had been over 8% in 2010.
Big banks are under pressure to find new fees. This is driving away customers.
Checking account fees have been on the rise at the nation’s biggest banks over the past year, and customer revolt against big banks really began to mount after Bank of America (BAC, Fortune 500) proposed a monthly fee for debit card use last fall.
Even though the bank later backtracked on its decision, the announcement led to a nationwide, social media-fueled “Bank Transfer Day”, during which customers encouraged each other to dump their big banks for community banks and credit unions.
The report also found that many customers were already unhappy with the customer service at big banks, so when fees were announced or raised, there was even more of an incentive to switch institutions.
My view is that you should have money in a local bank to gain leverage for investing in local real estate. If a bank has repossessed a home, and you are a customer with over $20,000 in your account, the officer in charge of repossessed property will talk with you about getting the property for a minimal down payment.