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To Bank Local, Or Not to Bank Local

big bank So nearly twenty years ago I setup my first banking relationship with a small local credit union. Granted I was 14 at the time and it was really my parents that set it up for me, but I think there's something to be learned from this. As I ventured out on my own I decided it best to use a big well known bank such as Wells Fargo to bank with. I was thinking it provided me more security for my assets and a bigger bank knew what they were doing better, right?

I've recently come to some conclusions which are pushing me to re-think my decision. Granted a lot of this has to do with the current credit crunch, and banks just tightening down in general; however, here's what I've found.

My big bank sucks! Not only that, they are expensive. And not only that, they treat their customers like dirt. I walked in the other day to cash a 3rd party check, as I had done on many past occassions. Whenever there was any question about who I was or what the bank was going to do for me, a teller might call over the manager, who had visited my business a year prior and knew me well. I also maintained balances in all my accounts well enough to cover the check if for any reason it didn't clear. Well my story starts right here. The teller said No. It wasn't a "I'll check", or a "Let me get approval for you", it was a flat "no, we don't do that any more". Naturally, having done this many times previously I asked to speak with her manager. It was also an urgent matter.

Here's where the second bit of change comes in. The manager I knew and liked was no longer there. The new manager says "the teller is telling you the fact, we don't do that anymore". I pointed out I had enough funds to cover any problems, and reminded them I could take my banking elsewhere. It didn't matter, they refused to serve me. Keep in mind, I'm a very long term customer at this point who has not once ever bounced a check or had even a single late payment with this bank.

It must have been within a week after this issue that I got a letter from the bank. I really wasn't expecting anything, but upon opening it my 2nd bit of big bank news arrives. It went something like this: "the credit card you have with us is going up to to 18% interest". Wow, are you kidding me? I maintain decent balances in my accounts for money you can then use for investing and loaning. The bank then pays me virtually nothing in interest. I think Wells Fargo currently pays right near .2% interest; it might and probably is even lower. All this and for a person who has excellent credit, and has never ever ever had a late payment to them or any other bank, they are raising the rate up nearly 10 points. Why? Simple answer is they are greedy, and because they can.

So my days of doing business with this bank are certainly numbered, especially since I discovered an alternative. Taking a lesson from my parents twenty years ago, and having heard local radio advertisments for them for years, I decided to step into one of our hometown local banks. Here's what I found:

money management 1. The 3rd party check is no problem, so long as I have the balance to cover them until they clear.

2. The same people have worked at this bank for 10-20 years. They don't have high employee turnover such as my old bank.

3. They pay me to put my money there! Currently they are paying 1.5% on money just sitting in a checking account, which honestly is the most convenient place for it for me for ultimate liquidity. They pay more on CDs and other savings vessels too.

4. The people are friendly and want to help, in contrast to Wells Fargo's policy of quoting corporate scripture.

The only downside thus far about banking local are a couple conveniences which I've come to rely on over the years. This is making the transition take a bit longer.

1. Their ATM doesn't accept deposits. They do take deposits at the teller or nightly drop box. So now I print a deposit receipt from my favorite property management software, and just drop an envelope in the night drop box.

2. I haven't been able to successfully tie my bank accounts in with my personal finance software. I am told it is possible; however, it's clearly not as easy as it was with the old bank.

So to you AR members. Where do you bank? Big faceless policy driven bank, or a local one?

--- about the author ---

Rentec Direct provides property management software free to landlords and property managers. Because of the importance of thorough screening for prospective tenants, we have integrated tenant screening directly into the software so in just a few clicks a complete and comprehensive background check including previous evictions can be done on any new tenants.

Posted by Nathan Miller on 11/08/2009 09:34 AM

Comments (86)

Interest Rates in the Mortgage / Finance Channel

banking, wells fargo, local banking, checking interest, property management software

Originally posted at: Rentec Direct - Property Management Software: To Bank Local, Or Not to Bank Local

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86 Comments on To Bank Local, Or Not to Bank Local

NOV

This is a great post. I currently bank with A BIG BANK. Man, the fees alone will kill you! Fortunately, my personal banker AND the branch manager is a dear friend that I have known for 18 years. I call her, she waives the fee. I know if I did not have her, I would move my money today.

Real estate licensing regulations often dictate where we can bank * FDIC, etc. However, while I have a local bank for my corp operating and secondary client escrow account, I maintain a Merrill Lynch Wealth Management account for client escrow funds with REMOTE deposit capability *from the scanner on my desk!!!! Any interest on the account accrues to my corp in management agreements and no more GOING TO THE BANK to deposit rents!!!

Great point Stephanie! I forgot to even mention the fees.

$6/mo just for the privlidge of banking with them.

$9.95/mo for online banking and bill pay.

3% foreign currency transactions (although this may be true at local bank too, but it's a RIP!)

How can these banks not be making money hand over fist? Especially considering how the fractional banking system works. The banking "crisis" truly does confuse me as it seems the banks are the ones fairing really well through all this.

I will give it to Wells Fargo though, their online banking system is probably the best! Is that enough though?

Nathan....I have always banked at the local banks.....I use several of them....they know me.....there are no fees......they give me the proper direction when I ask for assistance.....you're more than just an account # at a local hometown bank.

Nathan -

Great story. We don't have Well Fargo branches in our part of the country, but I have heard very similar things from clients coming from Wells Fargo territory.

Nathan, were you referring to banks used for our property management accounts?

Diane,

Yes, property management is the business I am in and most of the fee's imposed by banks are upon us smaller business customers. It's small businesses such as private landlords that get hurt the most it seems. The same issues also hold true for personal accounts though.

Hi Nathan ~ I've never banked with a big bank - the fees are an outrage. I've always banked with a local bank but even that one has started up with some of the money grubbing tactics. I'm with a credit union for most of my banking and am completely delighted with it.

On a side note - the doubly endorsed check thing seems to be a problem all over the place nowadays - after planning to leave a bank because of that very issue I went to a single branch longtime local bank and explicitly asked about their policy for that - and they were no longer cashing them either.

It's clear to me that we need very strict national consumer protections. The financial industry is taking gross advantage of the public in this country.

Liz

NOV

Interesting post Nathan. I was hoping that maybe you'd talk about how the Big Banks are dropping the ball in the mortgage origination game and how it is opening up opportunites for small, local mortgage bankers.

My vote is local all the way. If a client receives a preapproval from our local bank, there is never a question about whether the loan will be completed and on-time. Oh, and the fees are much lower. Then there's the whole thing about service.

I've banked practically forever at the local credit union, which works very well. And if I ever wanted to bank somewhere else, or additionally, I'd go to the local bank no matter what. These large banking firms should lose all this business they don't deserve; it would be nice to see them one day in the future, asking for our business, and making it worthwhile for us to use them!

What an experience and unfortunately this is not just for banks anymore too. There are more and more companies, BIG ones that are figuring this out and it's the lack of customer service that is so infuriating to me!

Local for me! I have a great relationship with the president of our local bank - a branch of family owned United Bank, said to be the most profitable small bank in GA. They earned that distinction the old fashioned way - through sound, customer friendly banking practices.

Every chance I get, I help new clients establish banking relationships with them.

Think globally, spend locally.

I already left my BIG BANK and am considering where to go next. Since I already have a checking account with a BIG BUT NON-PUBLIC INVESTMENT FIRM that didn't need to be bailed out, I can take my time shopping around. Many people I've been talking to lately have the same idea.

Get this. The bank I dropped now want me back by offering a $100 gift certificate if I sign up again. Funny, when I cancelled and commented about the bank officer's dismay at my wanting to cancel, she claimed that hardly anyone was leaving. Uh-huh.

I bank with BB&T which is a medium sized bank in the Southeast. I know a branch manager and the few times I've had a hold or something, I gave him a call and it was fixed immediately.

The big banks don't deserve the business. I'd pull all the money out of them and put it in a local bank or credit union. For the small amount of interest they pay, you might as keep you money in the Bank of Sealy ie. your mattress.

I'd also get in the habit of paying with cash in order to keep them from collecting those transaction fees when you use a credit card. It's outrageous how they jacked up rates. The merchants pay them a fee everytime you use a credit card so the merchant just increases their prices. So pay with cash as much as possible.

CAN YOU SPELL CREDIT UNION??? THAT IS THE ONLY PLACE YOU WILL SEE ME...AND OURS HAS FANTASTIC MORTGAGE RATES, SUPER LOW FEES AND SUPERIOR SERVICE.

I saw the writing on the wall about 18 months ago and closed my BofA account and moved everything to my local community bank. I will not support any of the arrogant, too big to fail large banks. I think we need to break up all the large monopolies. Too big to fail means you are just too big. We need to flip Wall St on it's head. We should be downsizing and breaking things up and we should not allow them to keep getting bigger and bigger anymore. The big box stores are another mistake. That's how we got into this mess. We need to think locally for banking, jobs, food, purchases, community, politics, environment. We need to decentralize everything, especially power generation. That will provide unshakable national security. If we all start thinking and acting this way, we have a shot at saving this country. For more insight on how other successful models could work, check out the Mondragon model. It's a real eye opener.

Great blog, Nathan. I like the local banks for both my personal banking and for buyer clients. They just have better service.

I quit big banks about 15 years ago. The snippy little teller at Bank Of the Northern Hemisphere told me I could "do that at the ATM machine!" when I asked for some information. I told her I could "also do that at another bank". Withdrew my $$$ and took it to a local bank. I know them on a first name basis. Nothing is ever a problem. Only downfall, they don't have a branch on every corner, but with online banking, who cares!

I learned that lesson years ago and will only bank locally because they actually care about the people they serve. The are also more willing to work with you, should problems arise that you need to renegotiate loans, etc. They also close property much quicker and with less red tape than the big banks. Only drawback is that usually their loan interest rates are a little higher and their terms are not fixed rate. Good post!

I really feel you on this one. Its as if the larger banks don't want our business. I've always gotten really good service at the credit union and smaller local banks. Unfortunately, they're being swallowed up by the big guys.

I actually moved from a local bank to a "huge bank" a couple of years ago. My local bank started imposing fees on everything, including a fee for making a deposit (which included charging me for every check that I was depositing as well as a fee for the deposit slip.) Although this large bank is nationwide, we are a small town, so the turnover isn't high and the people that work there live here as well. But, because I have direct deposit everything is free. I don't have a monthly maintenance fee or a fee for online banking, I don't have a fee for withdrawing money or a fee for making a deposit. I don't have an ATM fee or a fee for anything else. Now, if a local bank would be so accommodating, I'd be very happy to use it.

I agree that consumers are fed up with the 'banking machine' and I'm one of them.

The level of service is so trashed that if any of us tried it with our clients we'd be DONE.

While it is sad that most banks have lost the "personal touch" in doing business, the convenience offered by their electronic banking is hard to beat.

I do have an observation about a comment that Wallace made in reply #2 - in MA, interest earned on customer escrow belongs to the customer. What you are doing would be cause for an ethics complaint and possible sanctions against your license. If I were in your shoes - I'd check with a competent real estate attorney in your state about what you are doing!

"I currently bank with A BIG BANK. Man, the fees alone will kill you! Fortunately, my personal banker AND the branch manager is a dear friend that I have known for 18 years. I call her, she waives the fee."

Comment #1 just rang by bell...

It seems to me that this is the same crony capitalism that got us here. Sure it's only a $25 fee or so, but there is no moral difference between waiving fees for a friend and a multi-trillion dollar bailout from the Treasury and the Fed making bad decisions good for their "friends" on Wall Street (campaign contributors/former employers) with the taxpayers' money. Goldman Sachs calls Tim Geithner and he "waives the fee"!

Unfortunately, small local lenders may be driven out of the mortgage business by Barney Frank and the House Financial Services Committee. There is a proposal that every mortgage lender must retain 10% of the funds that it lends out in mortgages. For example, if a bank has loaned out $100 million in mortgages, it must have $10 million on hand as a reserve against mortgages that have gone bad. Most local lenders cannot meet this new proposed requirement. The only ones that will be able to do this are the big five national lenders. Of course, one of the reason that have the resources to meet this 10% requirement is the TARP funds they received. Let us hope this legislation can be defeated.

Nathan,

I use a big bank that I've been with forever. I don't pay fees..... but I also have a credit union account just as a precaution!

Kathy Opatka

Maybe we need to go back to a CASH using country.... what would the banks do then??

A recent Banker and Tradesman article noted that local lenders are dominating in many towns in the area or mortgage financing. For years, national banks/lenders had control of mortgage lending throughout the country. Now consumers are flocking to the community banks for both retail and mortgage lending. It's all about the service.

The big banks are becoming criminal in the way they are charge fees to their customers.

My father (who is 79) has always paid is bills on time and never had problem. His local bank in Ohio was sold several times over the past 10 years and his account ended up with a large bank.

In January of this past year, my father was hospitalized for about 30 days. During this time, m y brother paid is bills using what he thought was my dad's checking account. The account was actually a line of credit my father never used.

When my father was released from the hospital, my brother took him into bank and my father paid off the line of credit. Keep in mind, he went personally into the bank to pay off the bill.

Over the next few months, my dad received a statement from the bank on his line of credit but did not look at the statement because hed did not owe them any money. He had paid it off.

He was surprised when the bank debited his checking account for $250.00.

My father owed .43 in interest when he paid of the line of credit. (He thought it was paid in full when he went to the branch.) The 43 cents had become $250.00 with late fees. The bank refused to refund any of the fees. The also reported him late to the credit bureaus.

What is wrong with this country that a person can be charged $250.00 for .43 cents of interest which should have been colllected at the time the line was paid off. This is criminal.

Outraged over the fees banks charge.

We bank with Webster Bank, a locally-grown bank with offices in only 4 states: CT, MA. RI and NY. They have always treated us well and we would probably not leave them unless they started acting like one of the Big Banks. From all the horror stories we hear from friends and clients who use the Big Banks, we'd rather keep our money in a mattress than go to one of them! There is always the Realtors Federal Credit Union to consider, but I don't know of anyone who uses them, and they're too new to have much history behind them, but they can't be any worse than a Big Bank, and may be quite good, who knows?

Anyone have any experience with Realtors Federal Credit Union?

I recently signed up with the RFCU.

So far, so good- maybe if all REALTORS would join, we could get something good going here.

I firmly believe in local banks. The ties to the community are stronger, the flexibility is better, and as you also noted more consistency in their employees.

Nathan,

I have banked with a local bank for years and have not had any problems. Quicken works with their on-line system, the ATM takes deposits, everyone knows my name and says, "Hi Fran," when I walk in, and I haven't had any issues with cashing checks.

I have a client who has been banking with our local B of A branch for years and last week went to the bank 2 days after depositing her payroll check from our local school district to get a cashiers check. B of A told her they couldn't do that and she would have to come back the following day! She used to know everyone in the bank, but now there's a new manager from out of the area and all the teller's are new. I think she's about ready to switch banks. It was a huge inconvenience for her to have to come back the next day and she was pretty upset.

Customer service is dead with the big banks. I guess all the bail out money the banks received didn't help any of us little guys.

I would guess that if ObamaCare passes, the same thing will happen to medicine. Customer service in medicine will be a thing of the past as well and getting in to see a doctor in a timely manner...doubtful.

How timely that you wrote about this subject. This past week I was ready to pull my hair out because of what happened at my local BOA and my local credit union. I deposited a title check at BOA and had a 2 day hold on it - normally my funds are available the next day - eventhough you and I know that with Check 21 - the money is collected within minutes via the electronic clearing system. This is the first time that a title check or any of my checks have had a 2 day hold on it.

To make matters even worse my credit union has finally joined the Check 21 system and my deposit to them was instantly debited from my business account the next day but because they had a 2 day hold it was considered overdrawn even though the funds were there.

The banks are using old check clearing rules from the 80's that have always been there to generate new fees - they generate additional days to make money off our money while declining access to our money.

The only way to prevent this is to actually go to the bank that issued the check which of course could be impossible if its drawn from a major account in another state and city.

BOA has a new system that tells them what checks to put on hold depending on criteria that they have set up.

The only thing that kept me from pulling my accounts is the fact that because I have a mortgage with them - (sold to them from Countrywide and Greenpoint) I can have free checking accounts, get free cashiers checks and some other "free" stuff.

I am giving them one more chance and have put in a call to my local state regulatory board to see if I can have my operating account at a credit union. Would make my life much easier.

I am also spreading my accounts across other banks just in case "too big to fail" is allowed to fail in the near future.

Great post!

This is perfect, as I am leaving Bank of America and going back to my credit union. they are not local, but they are awesome to deal with. Big banks have gotten too big for their own good. Yes, there is a certain amount of convenience to them, but when you get fee'd to death and they raise your credit card rate just because and pay horrible interest rates it really makes you rethink how much you are willing to pay for convenience. And we certainly aren't paying for service.

I worked in banking for years before real estate and I have seem them grow. I went through multiple mergers over the years and eventually went to a small local bank to work. At the time I didn't care for their web banking so I went to our largest regional, Fleet Bank, and was for the most part very happy. Then Bank of America got their hands on them and it went steadily down hill from there. I don't think letting them fail is the necessarily the answer, but they need to be dismantled and not allowed to grow this large. More isn't always more.

I also left a big bank for a local one a few months ago. This was the fourth time my bank had been taken over by another one and with each takeover the service got worse and worse. They wanted 10 days to clear large checks even though they were trust checks from escrow companies.

I went to a local bank and the differecne is amazing... I walk in and everyone says hello and knows my name. If there is anything weird about a check I get a call. This is how banks used to be.. they treat customers as something they value.

@ Kathy O,

I believe the answer to your question about CASH is the complete economic collapse of the US Dollar. I don't pretend to understand it, it's way too complicated; however, I do understand the USD is entirely based on credit. If credit dries up completely and people and businesses stop going further into debt the USD collapses.

It's a downward spiral which ultimately only has one possible conclusion. It's just a matter of how long can the FED stave off the inevitable.

Here's a youtube video explaining it pretty well.

Great post Nathan. It is important that these things get aired out. It's funny how much more I am encountering your same frustration with big banks. That's okay because I know that banks are in a service industry and when they fail to serve their clients, Big Banks get small. Take care and have a great day.

I love your post Nathan. I am currently banking with a small operation and I couldn't be happier to call this Bank, TIB, "my bank". It is amazing that more of us have not already made the switch from big to small with our banking needs, and maybe it is time.

Congratulations Nathan, You seem to be batting 1.000 on this suggestion. Who would have thought that ridiculously high fees, crummy service, and viewing your customers as nothing but cash cows actually matters.

By the way I think that I've found where a lot of the TARP money is going (aside from loan reserves,)... collections. I've been getting calls from creditors (all of them) the day after a payment is due on my mortgages and credit cards. They ask for immediate payment (forget the grace period) and then try to ask lots of personal and financial questions.

I'm starting to think that it's time to ask them to move in with me or get another bank. Guess which one?

I have had the same problem with my "Big Bank" and have taken most of my business to a small regional bank. One thing my big bank did several years ago was return a check I put in the ATM because they did not like my signature. During this time I hit 5 overdraft charges. I no longer make any deposit at an ATM machine.

Tri-Counties Bank here in Northern California is great and I highly reccomend them. I have Posted on them before.

Big Banks Deserve to Fail!!!! No More TARP.

Several years ago my son wanted to invest some money in the stock market and since Wells Fargo had an investment arm he put his savings on Harley Davidson (he thought a bike was cool although his mother refused to let him do anything but dream) stock. He made money on it and the stock split making him more money. The Wells Fargo imposed an inactivity transaction fee on his investment account and started selling off his stock to pay for letting the money sit there in the form of shares of stock. Well we caught on after they had sold four or five shares of stock and sold all the shares and took all our money out of Wells Fargo. Needless to say we were not pleased and have only dealt with the local banks and credit unions ever since.

The big banks cannot seem to get the job done anymore. I use a mid-sized bank. I am happy with it, but have had some issues. If I make a move, it will definitely be with a local bank or credit union. Also, as others have mentions, the big banks have completely dropped the ball when it comes to mortgage underwriting. In my experience, they have little regard for the clients' best interest, and closing dates seem like suggestions rather than deadlines on legal-binding contracts. It's very frustrating and changes are looming.

I too used the big banks for years. Now I 'm with a smaller local bank and the service is fantastic. I'll never go back to the big guys....

BANK LOCAL! Great post! More big bank garbage! I have been filtering my money out of my big banks and into a local place recently as I firmly feel that the big guys have lost their touch, are filled with greed, will continue rip off tactics and therefore DO NOT deserve my business. I like you am text book about my business, credit and so on. Been with them for 20 years with consistent unblemished behavior on my behalf. For them to try to punish for my good behavior is intolerable! They have truly lost touch with the basics. I would rather deal with some small inconveniences with a small/local bank then give these big crooks one more dime.

I also had an incident not to long ago where I had 30k stolen from my account with 2 days from 5 different locations ranging from Sacramento to San Diego. It was ridiculous how easily the crooks got through. With all of the money these banks have I am stunned at the lack of technology in place to avoid such simple theft and that someone could get by them so easily. I told the manager that "you guys make so much dam money that you probably need losses like this to get write off's that why you don't have security in place to counter this kind of issue". The shocking and appalling part was that they did a 4 month investigation grilling me along the way. My banking patterns are so standard that I was shocked that they asked me the questions that they did. First of all, I told the manager, "how could I be in a Sacramento office at 10am and then in a San Diego branch 15 min. later all while being at work present and accounted for? You guys are complete idiots"!

Well IMO, they are creating their own demise! Time to turn the soil and allow new banks to grow. Hopefully they will learn by the mistakes of others.

I think that your comments probably hit home with a lot of AR's. For some reason, the concept of coustomer service has lost its meaning in the business world and the best and cheapest advertisement you can still get is word of mouth. Stay with the little guys, because they make you feel special!!

Always have a local bank. Always. I don't use the big banks any more. They divested my (sold, sold and resold) one too many times. The fees are ridiculous. I noticed the bank where I use the drive through atm recently changed hands yet again. Just not worth it.

I always have a policy of doing buiness locally, this includes banking. I want others in the area to support me and my business, so do the same for them.

I believe that a lot of people will be sharing your plight. Perhaps myself included! I will say that for the past year, I've been recommending that buyers go to local small banks to procure their loan. I have found that they're very interested in your business, turn around time is fantastic, rates are highly competitive, and their guidelines aren't always as stringent.

14 years ago I opened my checking account with a locally owned and operated regional bank and had a very good relationship with that bank. Several years later it was acquired by a larger national bank. Although I thought the customer service suffered a little, I maintained my accounts there and even added a few. Now that bank has failed and has been acquired by another large national bank. The customer service is even worse and they raised fees and made changes to my accounts without any explanation.

I fired them and moved my checking accounts to a smaller regional bank where I know the branch manager and he answers my calls personally (when you open an account, they give you a direct line to your personal banker). Their on-line banking is comparable to the big national bank's. As soon as I can, I intend to move my lines of credit away from them as well. I don't want to give them any more of my money.

Correct me if I am wrong, but I don't feel like raping your customers with excessive fees and providing poor customer service is a sound long-term business practice. However, in the short term it seems to be working as this bank has recorded strong profits for the last quarter.

Well you have certainly given me something to think about. I bank at a BIG BANK and also have mortgages with BIG BANKS, but maybe I should be looking at a local bank. I don't pay fees and they are nice to me at the Big Bank, but that may be because I live in a small town with friendly people. They provide free notary services, signature guarantee, and a safe deposit box.

I think that only way big banks will get the message is if mass quantities of us leave them. Great post.

Nathan...I am thinking about making a move to a non-tarp local bank.

Jerry Gray CRB,CRS,GRI / Prudential Carolinas Realty / Winston Salem, NC

I bank with a local bank - they're responsive, quick to sort out any problems and I feel they have a committment to Santa Fe. Unfortunately my mortgage is with one of the TARP Megabanks.

I hate everything about this Megabank, and now I understand why they have approval ratings that are in the US Congress range. Just as soon as I can I'll be moving the mortgage locally. What I DON'T understand is that Megabank takes no account of the fact that as a realtor I refer new mortgage business constantly - so they treat me just as cavalierly as everybody else. And it works - I have actively counseled clients not to work with a bank whose HQ they can't drive to.

Frank O'Mahony
evolve Santa Fe Real Estate

I bank with a local bank - they're responsive, quick to sort out any problems and I feel they have a committment to Santa Fe. Unfortunately my mortgage is with one of the TARP Megabanks.

Frank O'Mahony
evolve Santa Fe Real Estate

As a former commercial banker for 27 years, I to feel the pain. What used to be "relationship" banking is more and more what's in it for me (bank). Local banks can also have issues as they are at times inconsistent and sometimes want to act like the big boys. I think people should interview the banks and find a good fit.

I'm also realizing that the big banks are an issue in making closings on time. I just went through a transaction with your bank and it was a nightmare. It was only because I still have some connections in the bank that I found the right person for my client to talk to in another state to get the loan done. We had to do the 5th extension at closing. I'm going to start interviewing mortgage loan officers to find out who has the best closing records and who has the excuses.

Remember, your reputation as agents is affected by the lenders that you recommend to your clients, The best route to go is to give them several choices and have them interview them in the pre-purchase stage and don't be afraid to tell them if you've had challenges with lenders.

Great article. I bank with both Wells Fargo and a local credit union. Love the easy access to ATMs with Wells, but just like you I just got the we are raising your interest rate on your credit card letter just because our lawyers found a loophole in the new regulations that will allow us to put the screws to you as long as we do it before February. As soon as I can pay off that card, we are done.

Love the credit union, just like you said, same peope, great rates, no flack, they actually HELP you. They also don't invent fees for every little thing.

This country is headed down a bad path financially and the bankers and oil companies will be the only survivors. Oh, and the politicians that are enabling them to do so.

Howard Rudin

John Hall & Associates

Scottsdale, AZ

602-390-8088

Nathan, I love your post. i feel the same way and have plans to change my bank. Bye Bye Chase and hello Evergreen.

Jena Heth

I hate them all. I'm just getting tired of being treated like a thief for trying to cash a $10 personal check from a client. I had to put MY FINGERPRINT on the front of the check! And this was at the clients bank!

As an investor, I bank with a number of banks including U.S. Bank, BOA, JP Morgan Chase, and National City. Its good to keep your options open when you invest and are looking for choices in lines of credit and credit cards to fund purchases and rehabs. However, recently these banks have started to reduce lines of credit, increase interest rates, and reduce available credit. I've started to move towards private lenders and will be visiting local banks to see what they will offer.

I used to work for a local bank as the IT Director for 11 years. I was able to see, first hand, the rewarding experience customers received. Local banks is the way to go for lower costs and better treatment. Even, as a former employee, I am treated as a valuable customer.

Like Paul Tomlinson, I am a RE investor and still using big/small bank LOC and funding, but have been using more and more private lenders to purchase real estate. We pay a higher % of return to the private lenders, but we do not have to wait for funding or declines when buying real estate can be a time sensitive business. Realtors should love us for being able to use the "cash" of private lenders.

Yes, we make LOTS of low ball offers (so Realtors you should systemize the offer process) but when one does get approved the Realtor does make money. Then that investor (most are good people and not scammers) can provide a good property to a new buyer (usually at discount as is or fixed up). The investor has to take the risk of that property until sold. How many times have you seen retail buyers offer more only to back out at the last minute due to other lenders saying no?

So remember, I'm buying more houses this year then your one time retail home buyer! Plus, I'm easy to deal with and not too picky.

Go network at your local REIA (real estate investor association) and work with investors. Learn to systemize your offers and learn the way investors think. You can work less, make more money in bulk, and still be able to work with retail buyers.

So remember, I'm buying more houses this year then your one time retail home buyer! Plus, I'm easy to deal with and not too picky.

I am now with a big bank whose polices almost mirror the last big bank they swollowed up. There are no exhorbant fees and the service has been quite acceptable. I have been tempted to bank locally but before I did the local bank sold out to a larger bank. That larger bank was swollowed up by another bank. The largest credit union in this area seems to act and charge fees as if they were a big bank.

For now I am staying with the big bank (Chase) and see what happens. I haven't changed banks in over twenty years but the names of the banks have changed and now Chase is the fourth one! Who knows when the bank you chose will be bought out by one of the big boys?

No contest for me. Go local. Many of them have fared quite well because they stuck to sound financial principles and appreciate thier customers. Big banks are still reluctant to make loans, but local banks have no need to hunker down and are conducting business as always.

I am about to jump ship and move to a local bank, as well.

Wells Fargo. I take advantage of their PMA accounts. All my fees are waived and 100 free stock trades a year.

NOV

Nathan,

Where you decide to bank is drive by convenience, service, price, products, and personality. There is no "one size fits all". Your demands on a bank are different than mine. I do not do property management. I deposit few checks. No cash. I write few checks. I use the ATM almost exclusively. I pay most of my bills on-line. My renters (I have none.) don't write me bad checks. I don't know if I have ever had to negotiate a 3^rd party check.

My choice for a bank fits my needs. It may not fit yours - or those of numerous other who have commented. But your bank - and their banks - may not work for me, either.

Good exchange of information, but not the stuff that will drive my decision about where I will bank.

John Juarez, REALTOR

Windermere Properties of the East Bay

John@CarlMedford.com

510-673-0686

Hi Nathan,

I bank at a big bank but have not been happy with them for some time but unfortunately every thing we have is with them including a student loan for my son that I regret getting through them. Our first try at our re-fi turned out terrible. My son had his identity taken and they were awful with him. I should have moved everything out then. The people in our local branch are very nice to me, but apparently all other areas of the bank are not connected. I was surprised that they did not look into our history with the bank itself to see what kind of customers we have been for over 30 years.

I'm ready to go local but am not sure I'm ready to give up some of the conveniences of being able to move money to my kids who are in other parts of the country at this point.

Thanks for your post!

I have a local credit union account with Apple Federal Credit Union and a checking account with Wells Fargo....The fees that are charged by AFCU are insane including ATM fees, I wouldn't have a problem with the ATM fees except there a total of maybe 20 AFCU ATM machines in the entire Northern Virginia....I have NOT been impressed wiht the local credit union.

The impact of having 120 banks fail year to date in the US is immense...most of these banks were small size local banks...this ultimately hits you and I in the pocket as tax payers...There are too many banks in the US that should have never been established at the first place.

I've never been impressed with the service(or lack thereof) and exorbitant fees at big banks thus I've banked with a credit union for 37 years and have been very pleased. Although they are in our area, it is a bit of a drive to get to them so I do my deposits and small withdrawals through an ATM. I have a second smaller account with a local bank that is a couple of blocks from me just in case I need to cash a check or withdraw more cash than the ATM will allow.

We bank with a mid-sized bank and have had some of the same issues, not wanting to cash a 3rd party check, turn over of employees, etc. It is very frustrating to not at least be notified by mail, email, something to let us, the customers, know that changes have been made. We are looking into making a move as well to our local bank. Our company already banks with this bank and they have a great relationship with everyone there from the tellers to the managers. Relationships make a big difference!

Great post, Nathan! ...not to mention from the vantage point if one gets into trouble through a job loss or medical problem. Guess who will work with you better? You're right! The Local Bank or Credit Union! For those of us who have had to work with big banks for Short Sales or Foreclosures, give me a small local establishment anyday! - Jo Lyman

Nathan, Thank you for your personal and compelling post about why big banks don't deserve your business. Though I'm a community banker, I can honestly say I'd never consider doing business with a megabank even if I changed careers. One of the respondents mentioned Remote Deposit Service as a benefit to staying with the big bank. Not a good reason, my friend. My $1Billion community bank has been offering RD for years, and many smaller banks presently offer the service.

The only way community banks will be able to survive the Obama/ Reid/ Pelosi onslaught is to gain market share from the big banks through a grass-roots groundswell of support from US citizens. I ask everyone to begin "voting with our feet" just as you did. Like they say about class-action lawsuits, the surest way to get a big business's attention is to hit them in the bottom line.

Do it.

Close your accounts at the big banks today and let them know loud & clear that they don't deserve the privilege of using your money ONE MORE DAY.

Clark Blackwell, US Community Banker, Crescent Bank, Woodstock, GA

Nathan, I gave up on banks a long time ago. I do all banking possible with the local credit union. They pay interest on checking accounts, do not charge if I write a check and provide on-line banking for virtually free.

Boulder City Steve

Nathan, I love your artical. I have 7 accounts with Chase and I plan on changing all of them to a local bank. thanks for you great insite. Jena

loved your blog.. I own a brokerage and Chace has decide that they will no longer cash my agents commission checks over 3,000 and for that privy they will charge the agent $6.00 ... their responce ...'they can open an account here'... would you? I am in the process of takig my business elsewhere... no more big corporate anything... out with franchise, big corp fat heads and off to home town world.. I am done here!

WOW.....I could have written your exact post except for a couple of changes here and there!My b on Craigslist and deposited the cashiers check the next day at our CHASE bank. Then the buyer was emailing my husband weird requests after that. My husband told the buyer when the check cleared, he would ship the item. I suggested he go to the bank and explain that the buyer may have given him a bad cashiers check (as Craigslist said this can happen). I was out showing houses and my husband called and said the bank manager told him he was a crook and what he did by depositing that check was the same as committing murder and that the bank was going to freeze all our accounts and even his business account. And if after further review, my husband would not even be able to have a business account in the state of CA. anymore!......What?....my husband barely uses the computer, he is a hardworking man and has never engaged in any criminal stuff at all. I drove to the bank after my showings and asked to see the manager. I asked him what he had told my husband. He admitted that he had told my husband that...and that all of us customers ran the risk of this happening to us if the bank feels we have committed fraud. I said, what??.......do you realize he came in here to talk to you about it?....ask questions?...and you threaten to ruin him and his business and say that what he did was akin to murder???...he calmly said "yes"...so I got right in his face and said "don't you EVER accuse my husband of murderous conduct...you have lost your mind MR. Banker.......and walked out...and the guy still works there...hooray for CHASE BANK!!! they hire loony-tunes for workers. Credit Unions are where its at now!!...big banks=big headaches

NOV

I bank with one of the big boys (Chase) who pulled my credit line. I have great scores and have never been one day late. They wanted me to requalified again after having the line of credit for two years and I refuse too. They are currently on my s**t list.

I also bank with a large regional bank and most likely will be moving all my account there.

I won't pay fee no matter where I bank.

Everytime a local bank has been bought by a national bank they've changed the rules and made it more impersonal ! You need to create a banking relatioship with a branch mngr. who will value your business and help you obtain lines of credit for investing !!!

NOV

Wow Nathan. Times are changing fast. Banks are only looking at the bottom line.

NOV

I worked at Chase Bank and did not bank there due to privacy from fellow employees. I wanted to cash my paycheck and went to a local branch had all the proper ID including my employee security card and the teller stated no account need thumb print. There I stood with all the credientials, a security card that the teller is not authorized to have so I resigned my position imediately.

My business accounts where with a local bank which was next to my office, US Bank came in and bought them out. Fees went up service went down, all managers where released with new management. Nightmare of time, required new checks did not offer to pay for them while the ones I already had became useless, this cost me close to $1200 to replace for trust account and operational account. Cancelled my credit card for new reason other than they stated I was in risky proefession, real estate brokerage. My credit card with low limit was paid monthly when carried balance, my operation checking carries a balance of 500 times the limit of the card and I own my own office outright.

Moved back to a small bank, competition is needed to correct the insanity caused by the big lenders. Also found that the mortgage loan officers as well as committee have made good loan transactions making real estate sales a bit smoother. I am not only findng that the residential transactions to be smoother but I find the bank more agressive with investors who own a portfolio of real estate helping them purchase more investments. It pays to have a personalized mortgage banker. Furthermore it brings power back to the community.

Thomas Jefferson stated that banks are more dangerous to liberty than standing armies. Do not have the quote handy but I believe he meant strong centralized banks.

NOV

I use to work for Wells Fargo..12 years ago when I moved to FL i went to the smalle community bank...I had to drive to the next town....only 5 miles away...to open an account....but being in the mortgage biz and seeing how BOA and the other big banks screw borowers I was not getiing a bank acct with a big bank.....BOA and the rest don't care...

DEC

I was with you all the way (because I'm sick of my big bank) until you said that banks raise their rates because they are "greedy". Why is it that when other companies look to minimize costs and maximize profits that they are "greedy" but when we as realtors do it we are just "savvy" and "entrepreneurial"? How would you like it if your next client called you greedy for asking for a 7% commission, or if an agent called you greedy when you inquired to find out if that 1.5% co-brokerage commission is reciprocal or not?

Just because they are big companies doesn't mean they are greedy. They have the same fiduciary obligation to their shareholders to make big profits that you do to your clients.

DEC

I'm going to have to respect your opinion, but completely disagree with ya Matt. Citi/Chase/AMEX, probably many other banks are indeed greedy and proof is in the fact that they are raising interest rates on their card holders to astronomical values. I got a rate increase to 18%, and keep in mind I've never had a late payment and have A+ credit. I've heard of others getting interest rates around the 50% rate. That is pure and simple greed, no other way about it I'm afraid.

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