How and Why to Leave Your Bank
If you’re unhappy with your bank, you’re not alone. Most people think it’s difficult to change banks, or that there simply aren’t better options. That’s why I’ve put together this short guide that will help you move your money to a financial institution that can serve you better, save you money, and has a good record of behaving ethically and responsibly.
It’s not hard to find examples of banks putting profits ahead of consumers. In recent years, big banks have been sued for reordering checks in order to maximize overdraft fees, failing to disclose overdraft practices ensnaring consumers in debt, charging fees for checking account statements, and even opening accounts without customers’ knowledge to boost sales figures.
Community banks and credit unions focus on meeting the needs of their local communities. They’re an important source of credit, often serving communities that may otherwise be overlooked by big banks. At a community bank, you’re more likely to connect with a local banker who’s willing to consider personal circumstances like repayment history, not just credit score, when making a determination about a loan. Credit unions are not-for-profit, mission driven organizations that exist to serve the needs of their members. Credit union members reap the benefits of profits that are channeled into higher interest rates on savings, lower interest rates on loans and fewer fees.
Thinking about moving your money to a community bank or credit union? Here are some tools to help you get started:
Consumers Union, the advocacy arm of Consumer Reports, has called on Congress to make it easier to move your money from one financial institution to another. In the meantime, CU offers a step-by-step guide to make the process easier. http://www.consumerreports.org/banks-credit-unions/how-to-fire-your-bank/.
How to Move Your Money to a Credit Union
Credit unions are member-owned financial cooperatives that provide savings, checking and other financial services, and share profits among the members. You’ll probably save money by switching to a credit union. According to a 2009 study, the average credit union account holder paid $71.47 in annual fees, while the typical bank account holder paid $183.14.
Community Development Credit Unions (CDCUs) are credit unions whose mission is to serve low- and moderate-income people and communities. CDCUs specialize in providing fairly priced financial options to people with imperfect credit history, and financial education tools to empower consumers.
Here are a few tools that will help you find a credit union that meets your needs:
The National Credit Union Administration (NCUA) offers a geographic map to help consumers find credit unions in their area. NCUA’s ‘research a credit union’ tool offers consumers basic information about each credit union such as the address and phone number, services it provides, number of members. https://www.ncua.gov/analysis/Pages/locate.aspx
The Federation of Community Development Credit Unions lists CDCUs in each state. http://www.cdcu.coop/membership/membership-directory/.
Mother Jones offers a how-to guide for consumers who wish to move their money from a big bank to a credit union. The site offers basic advice on the process, how long it may take and other factors consumers should take into account. http://www.motherjones.com/politics/2011/11/how-to-move-money-big-banks-credit#1_2
A Smarter Choice, a project of several US-based credit unions, designed to make the case for using a credit union instead of a bank. The site provides background on credit unions’ structure and purpose, offers a side by side comparison of credit unions v. banks and includes a credit union locator tool to help consumers find local options. http://www.asmarterchoice.org/
How to Move Your Money to a Better Bank
The Independent Community Bankers Association (ICBA) offers compelling reasons to move your money to a local bank. For example, community banks are governed by local citizens who want to advance the interests of local businesses and community members. Average fees tend to be lower at community banks and bankers tend to be accessible to consumers on-site. ICBA’s community bank locator can help you find local options: http://www.icba.org/go-local/take-part/bank-locator.
CheckingFinder.com helps you compare checking account features offered by community banks. Consumers can compare up to three banks side-by-side to figure out which one meets their needs. https://www.checkingfinder.com/
Novantas, Inc., a financial services research firm, offers a tool to help consumers find financial services – including banks – to meet their needs. Their site includes information on national, regional, community and local banks, as well as credit unions and online-only banks. https://www.findabetterbank.com/
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