Big Banks Driving Some Consumers to Small Lenders
Feb 10th, 2010 @ 9:25 PM by Amber Nelson
Big banks are still in business, no doubt about it. But according to a CNN article today, their practices may be starting to alienate a portion of their customers. In fact, a recent survey from the Forrester Research company found that the nation’s largest banks like Bank of America and JPMorgan Chase are “among the least trusted U.S. financial institutions.”
That lack of trust may be pushing some people away, but I think the majority of those ditching the big banks are doing so for purely financial reasons. Fees seem to be continually rising while interest rates on savings accounts continue to plummet.
From the CNN article:
Barry J., who detailed his switch from Bank of America to Southeastern lender Regions in an email, said he had just become fed up with the $8.95 monthly maintenance fees on each of his three accounts.
“When I was closing my accounts, [Bank of America] would call me with a survey to see if it was the fault of any their customer service people or tellers or bank managers,” he wrote. “They never asked if it was the additional fees they were charging.”
And of course there are those like me who switched to local banks, enticed by more attractive savings rates. When my local lender offered a checking account with a 4.09 percent APR, and I was getting 1.4 percent with my Big Bank, it made the inconvenience of switching pretty palatable.
So the Big Guys may not really feel much of a pinch yet in terms of losing customers, but they just might in the near future with the way things are trending. And if people truly start flocking to their local lenders it may turn out that the major banks were not “too big to fail.”
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.