First Wave of Checking Accounts Coming Online

A couple of weeks ago I "walked the talk" along with many other people about Moving My Money. I took a lunch hour to visit a couple of local community banks. I wanted to see how much trouble it would be to establish new accounts. At each bank took about 20 minutes to open a checking account. I left with a small introductory package and a deposit slip indicating a new account hold while they processed the paperwork.

Two weeks later and the infrastructure is arriving. Each bank has sent debit cards -- in this case VISA Debit Cards -- linked to the checking accounts. PIN numbers and online banking IDs and passwords are meandering in. The opening deposits have now cleared. Welcome letters greeting me as a new customer have appeared in my mailbox. Alas, no new toaster to brown my croissants. Well, you can't have everything.

What I was actually waiting to confirm was what I already knew. Most community banks contract with vendors that provide the consumer "convenience" services you'd expect from a bank. These services are part of a mature and stable support industry that does most of the under-the-hood stuff for the banking business. This means that -- in practical terms -- there's little, if any, loss in quality of service these days between a small and large bank. Everyone you meet is friendly -- or is supposed to be-- and that includes the consumer-facing personnel at the big banks.

Bottom line: They all know how important your "core deposits" are. What's even more important is that more of these "core deposits" have become mobile.

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Comments

[QuicksilverKW]

12:07 PM on 01/22/2010

I really love watching this happen. So many people have felt trapped feeling there is nothing they can do to make a real difference, so they go on trying to make do with being taken advantage of, over and over. And now people are doing something that will most definatedly have an affect - more and more over the long run. I'm curious about how many meetings the big backs have had to discuss whether or not they think this will affect them adversely. I hope so. We may not all have big dollar accounts, but combine them all and it become a lot of money loss and fees lost for them. They can't do anything to you once you're gone, and that gives me so much satisfaction. Now, what other areas can us "small potatoes" affect and change because big government can't seem to get much of anything done for us either. It seems we're a lot more partisan than they are because this has nothing to do with being a democrat or a republican. It's about the human being.

[condor101]

09:56 AM on 01/22/2010

Return the debit card and ask for an ATM. This is to avoid any fees from using that debit card, which offers very little protection compared to a credit card. If you have a credit card, you don't need a debit card. Also, get your checks printed somewhere else, not from the bank. Banks are now charging $70 for a book of checks. That's ridiculous! There are other services that charge from $20-$30 for the same book of checks.

[Rogozhin]

12:02 PM on 01/21/2010

I love my credit union for loans and would consider switching there for my checking and savings. But can you provide advice about how to avoid ATM bank fees, since my CU - and most community banks - don't have widespread ATM access?

[staziaw]

12:24 PM on 01/21/2010

Most credit unions have "co-op" agreements with several other organizations to use ATMs without fees. My credit union, Wescom, has reciprocal agreements with something like 21,000 ATMs across the country.

Also, if you are needing cash, go to a grocery store, buy a couple of things, pay with your debit card, and ask for some cash back. No fees!

[redraspberry]

01:14 PM on 01/21/2010

I agree, only use the ATM when I'm out on vacation. Other than that I seldom use cash.

Been a Credit Union and local bank customer for over 40 years. Except for house and auto loans never use the big banks. And my current house and car loan are both through the CU.

[PennP]

02:55 PM on 01/21/2010

My small local bank (not on the good list--I'm switching) charges a fee for debit card use, but not if you use the same card as a credit card. People should check their own bank's current terms on their accounts before assuming they won't be hit with fees.

[zjemi]

11:12 AM on 01/21/2010

I switched to a community bank years ago when a big bank (now defunct, eaten by an even bigger bank) took over my other local bank. The big problem wasn't opening the account, but getting all the electronic funds transfers EFTs relocated so that my electric bill, gas bill, insurance bill etc come out automatically and my paychecks and interest payments go in automatically. That took six months or longer to get it all straightened out.

But once it was done, it has been nothing but good. Yes, the local bank did help, but they couldn't remember for me all the different payments and account numbers and what needs to be notarized and what doesn't. Switching wasn't easy but it was worth it.

[tjdestry]

07:29 AM on 01/21/2010

Surprised it took this long. My new bank had me completely up and running -- debit card, password, on-line access, printed checks -- within 10 days. And, yes, the hand-written thank you note. I was most surprised when the checks arrived nine days after I walked in the front door of the bank, but some of the other stuff was in place well before that.

They almost act like they want my business or something.

[kf40]

01:51 AM on 01/21/2010

I've preferred and use community banks and my credit union for twenty-five years. This doesn't make me a better or smarter person than someone who's just getting started, it's just that I like the personal aspects of that kind of banking, and being a part of my local community. My late father-in law helped start a community bank in a northern California college town and his wife managed the university's employees' credit union. They liked being involved and making things happen. Let's don't forget that to really make this thing happen it takes more than just those checking accounts that we use to pay our bills. In the big picture, it takes savings and investment dollars too. Keep up the good work, and make this thing happen.

[FinallyFreeOfGeorgeIII]

10:32 PM on 01/20/2010

I opened a couple of new accounts at a neighborhood bank last weekend with the family. I'm going to edge out of my Chase accounts until I can get clear. They still hold a huge HELOC and I don't trust them. For some of us, it's an easy process - walk in, flip them off and get your money. For others, it's a little more like trying to get out of the room with the bear in it before the bear bites you.

Even so, people, it's time to start.

[OrangeCatholic]

04:04 AM on 01/21/2010

I'm actually surprised at the popularity of the big banks. What's the advantage, really? Bigger banks charge higher fees and have lower interest rates. They aren't any more secure than a smaller bank - maybe less, if recent trends are an example.

I know that a smaller bank can't meet everyone's needs, but some credit unions advertise $1 minimum deposit and others advertise $50,000. The latter is some pretty serious banking imo.

Big banks have a lot of locations, but if you can get a small bank to give you free access to their atm network, then you're good to go.

[Chozee]

09:20 AM on 01/21/2010

Yes, the only advantage is the number of their ATM locations both here and abroad. The staff at my local Citi branch are actually great!
Weeks ago, Citi informed me they will begin charging me $7 a month if I don't maintain an average monthly balance of $1500! There will be no free checking with direct deposits anymore. That just edged me over the top. I initially thought of transferring to BoA (my hand on mouth trying not to barf!) because of their ATM network and "free checking" as long as you open an account online and have direct deposit. But I discovered that a local credit union not only offers REALLY free checking, but is also a part of a network that enables clients to withdraw -surcharge free - at any 7-11 and Costco ATMs nationwide! Same day, opened up a new account with my local credit union (whose only requirement is that members live, work, study or worship in the county that they serve) and I immediately faxed in my revised direct deposit form to my employer.
These big banks nickel-and-dime you and me while giving fat bonuses and golden parachutes to their top executives! I feel bad though for the wonderful people at my (erstwhile) local Citi branch - even the senior teller or CSRs don't even earn above $35K/yr, while their senior executives are still thinking of lobbying for taxpayer money to "maintain top-level talent." (barf!)

[grateful4thedead]

09:50 PM on 01/20/2010

Keep up the good work.

I strongly suggest you inform people to look at their mutual funds/401ks and get rid of those funds that have bank stocks.

think about selling your bank stocks...that'll get their attention.

[Dosadi]

10:56 PM on 01/20/2010

We should all handle our own 401k's. Why pay a manager millions a year to do what we all can do just as well? And before the naysayers get steamed up, yes you can do better than the fund manager. You just have to get off your lazy butt and do some research. But by all means stop paying these managers money to make money, pay them instead to protect your investment or do not pay them at all.

[DASChicago]

12:41 AM on 01/22/2010

Big time!