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Big Banks Want You Back

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The New Rules Project, in partnership with HuffPost's Move Your Money campaign, is using its Community Banking Initiative to get out the word that banking locally can put the power back in the hands of individuals and communities, rather than Wall Street's CEOs.

Those who wonder whether public anger at big banks and the Move Your Money sentiment sweeping the country is substantial enough to impact these giants need only look at the banks' own marketing over the last few weeks to see the proof.

In a spate of new advertisements and PR maneuvers, the nation's largest banks are working hard to win us back. They are, in effect, standing on our doorstep, flowers in hand, trying to convince us they've changed.

They're using words like "local" and "community," because they know quite well that there's a rival for our affections. A recent Zogby poll found that nearly one in ten Americans had moved at least some of their business to small banks or credit unions.

One jilted lover, Citibank, has launched a blog devoted to showcasing the "new Citi." The site, which Citibank is promoting through newspaper and magazine ads, features a video statement by CEO Vikram Pandit, who offers a few vaguely apologetic statements before detailing how Citi is a changed bank.

We've given up boozing and gambling, Citibank seems to be saying as Pandit assures us that the new Citi has embraced "a culture of responsible finance."

In his opening post, Pandit describes this as a "new chapter" and invites us to participate in a conversation. "We promise we're listening," he writes.

So far, many of the user comments, which are moderated, appear to come from Citibank investors, but a few disgruntled customers have managed to get through. "What Cit has done to 'help' me in the last year: interest rate increase to 29 percent!" writes Peter. "I have never been late with a payment... [You have] a total lack of caring toward your customer base."

"No amount of empty words can help you guys," comments another, now ex-, customer of Citibank.

The site makes rather conspicuous use of the words "local" and "community," suggesting that Citigroup, which has assets of $1.3 trillion, knows exactly where its customers are moving their bank accounts. When you load the site, a pop-up window that fills the center of the screen describes the company as a team of "local community bankers."

Citi is not the only giant financial conglomerate wrapping itself in the mantle of a local community bank. During the Olympics, Wells Fargo, which has $1.2 trillion in assets and some 10,000 locations, ran television commercials in which it described itself as "the nation's leading community bank."

Although there's no set definition of a community bank, it's commonly defined as a bank that is rooted in one place and has no more than $1 billion in assets. Wells Fargo is about 1200 times that size.

In a biting response to the commercials, Camden Fine, head of the Independent Community Bankers of America, warned, "Wall Street mega-firms better be careful what they call themselves lest they be confused with actual community banks that regulators allow to fail."

It's no surprise that big banks are grabbing onto words like "local" and "community," says Tim Pannell, president of Financial Marketing Solutions, which develops branding and advertising for banks. "Big banks understand that those are the key words that are creating success for a lot of community banks," said Pannell. "That's what they've been hammered with in all these local markets, where the community banks have said, you don't need a big bank, what you need is a local bank."

Rather than pretending to be small itself, JPMorgan Chase has taken a slightly different tack. New print ads running in the New York Times and elsewhere present the bank as a generous financial backer of small businesses: "At JPMorgan Chase, we recognize that small businesses are critical to economic recovery and to building America's future.... When creditworthy businesses come to us for help, we look to find every opportunity to provide the funding they need to grow."

According to FDIC data, however, JPMorgan Chase is very much a laggard when it comes to small business lending. With just 16 percent of its commercial lending going to small business loans in 2009, Chase is not even remotely in the same league as community banks, which devoted more than half of their commercial loan portfolios to small business. But even more stunning is the fact that Chase even lags other giant banks (those with $100 billion or more in assets), which allocated an average of 19 percent of their 2009 lending to small business loans.

(Take a look at these graphs to see just how little support for small businesses big banks provide.)

All of this is just an early taste of what the rest of year is likely to bring. Nervous about customer defections and holding a lot more cash than they had last year, big banks are planning to spend big bucks on marketing this year. We should expect more speeches about how they've changed and more false claims about community and small business. But let's not be seduced into taking these jerks back.

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Stacy Mitchell, who has tracked corporate "local washing" across a variety of industries, is a senior researcher with the New Rules Project and its Community Banking Initiative.

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