A.
Identify Local Banks
1. Compile from
your local Yellow Pages a list of the banks and credit unions in your area. Delete names that you know to be large
banks, including names on the Solari U.S.
Banking Tapeworm 20 List.
2. Visit your local Chamber of Commerce and ask for a list
of all banks in your area. Ask which ones operate
only locally and/or regionally and which are owned locally or regionally (or, if credit unions, which ones are controlled locally).
A local bank is a bank that operates within your local
area and is primarily owned or controlled by people who live within
or near your local area.
A regional bank is one that operates in your state and
a few other states and is owned and/or controlled by people based
in those states.
B. Collect Information and Recommendations
1. Do Web searches to identify websites for the banks on your
list and the information they disclose. For banks that issue publicly
traded stock or other securities, check their website or the EDGAR
system to access the annual report, proxy, and other filings they
file with the U.S. Securities and Exchange Commission (SEC).
2. If the data you are looking for is not available on the Web, call or visit the banks
and ask for information regarding their area of operation, who
owns and governs them. Request copies of their annual report (including
financial statements) and information on and prices of products
and services of interest to you. Also ask what percentage of their deposits
they loan locally (as opposed to reinvesting in national or international
money markets) and what their correspondent banking relationships
are so you can discern whether or not they are channeling their funds
to one of the U.S. Banking Tapeworm 20. Use this percentage figure to compare with
other banks in your area.
3. If a bank is reluctant to provide you with its financial
statements or you find it difficult to persuade their representative to give you
a copy, delete the bank from your list.
4. Tell your friends, family, and trusted professionals and business
people in your community that you would like to shift to a local
bank and ask them for recommendations of local and regional
banks that have provided them and their networks with the best service
and support.
5. You
may want to check with the rating agencies or bank rating services
to see what additional information is available about the banks that emerge as the most likely candidates.
Another source of information on the bank's history Lexus-Nexus; do
searches for the bank itself as well as its owners, board members, and top
management.
6. Based on these steps, identify the two or three best potential banks
for you and proceed to the next steps.
C. Evaluate the Bank's Leadership
1. Owners
Do they live in your community?
What is their reputation and experience?
2. Trustees/Governance
Do they live in your community?
What is their reputation and experience in banking, investments,
and the types of businesses, governments, and other organizations
that the bank serves?
Are they people of integrity and competence?
Do they represent a diversity of experience, knowledge, and networks
in the community?
Are they motivated and caring people?
Do they care about their business, and are they proud of the principles
on which the bank operates?
Do they care about their customers and their colleagues?
3. Management
Do they live in your community?
What is their reputation and experience?
Is turnover low?
What is the spirit you feel when you walk into the bank?
Are they professional and proud of the organization that they
represent?
Your intuition is an important guide. Talk to a loan officer or
branch manager: Do they have freedom to make decisions and
do their jobs or are they heavily bound to top/downprocedures? See how they handle your requests. Ask what the procedures
are for a getting a loan or opening an account. There is a often a direct
correlation between the quality of service and the number of hoops that customers
have to go through, how much paperwork must be filled out, and the fees that must be
paid
D. Profitability and Financial Safety and Soundness
What is the customer base of the bank?
Does this customer base represent a strong diversified base of
deposits and lending business?
Review the bank's financial statements:
Has the bank been consistently profitable?
Does the bank show a strong base of equity, retained earnings, or other
financial reserves?
What and who are generating the profits of the bank, and what are
the potential risks associated with those profit flows?
Do the bank financials indicate a sustainable flow of business
that would be sound even in difficult economic periods?
Would the bank be safe and sound in a scenario in which we could
not depend on FDIC deposit insurance?
What is the ratio of loans to deposits? Do they have extra
cash reserves above what is required by law? This shows a conservative
loan-to-deposit ratio.
Does the bank avoid high-risk financial practices such as too
much debt and large derivative portfolios?
What are their correspondent banks and other strategic
relationships?
In the course of asking for recommendations, find out if there are any
instances of customers being delayed in accessing the cash in
their account. Delays in getting money out are a bad sign.
E. Locations and Services
What are the main office and branch locations, and what days and hours are they open?
Make a quick list of the products and services you now use, as
well as the products and services you would value—such
as checking and savings accounts, wire transfer services, safe
deposit boxes, ATM cards, credit availability, and affiliated investment
services.
What are the products and services available through the bank
and their affiliates? Compare this to the list of products and services you need and
value.
F. Fees, Costs, and Interest Rates
Review the fees and costs of either switching your account or
simply creating a new account.
What interest rates and payments do the bank provide to depositors
or investors in certificates of deposit?
If the institution is a credit union, what is its history of distributing
profits?
G. Confirm Federal Deposit Insurance
If you want to confirm that the deposits at your new bank are
indeed federally insured, you can contact:
United States Federal Deposit Insurance Corporation (FDIC)
550 17th Street, NW
Washington, DC 20429-9990 USA
E-mail: publicinfo@fdic.gov
Tel: +1 202 736 0000
Fax: +1 202 898 3772
http://www.fdic.gov
National Credit Union Administration (NCUA)
1775 Duke Street
Alexandria, VA 22314-3428 USA
E-mail: boardmail@ncua.gov
Tel: +1 703 518 6300
Fax: +1 703 518 6660
http://www.ncua.gov
H. Make the Switch
You can either close your old account or open your new one
as your old account runs down. Some depositors prefer to leave
the old account open for automatic transfers
and/or deductions (it may take a while to
make the changeover for those services or it may seem too risky to change). Others prefer
to make those changes before starting to operate out of the new account, to avoid the expense and complications
of having two accounts in operation.
If you are comfortable
doing so, when you close your account or otherwise withdraw from your prior bank, explain why you are moving your account. This type of
customer feedback can have a significant impact on bank policies—particularly if enough people do this.
When you open your new account, make sure you communicate with
your new bank about why you selected their institution. It takes a lot of hard
work over many years to create and build such a bank. Your new
bankers will appreciate knowing that you are aware of their efforts
to build and manage a safe and sound business that supports your
community.
If you are interested in doing so, let your new bankers know
that you would like their help in understanding what you can do
to help them support local business and your community and to
help the money in your area come clean.
As you make the switch, set aside some time to make
sure that the process of working with your new bank goes well. Change
is a learning process. There may be glitches. Take the time to
work them out—to give feedback—and work with your bank to ensure
that their products and services are working in an ideal way for
you. Remember, your new bankers want to do a great job for you.
Good banking relationships are like all banking relationships—they grow and succeed as we invest in them and hold them to
the highest standards.
I. Feel Good About Your Efforts to Come Clean
Once you are confident that you have moved to a bank that you
are really happy with, sit back and feel good about your efforts.
Decentralizing our financial system is a lifelong process,
and you have taken a very important first step!
Enjoy your accomplishment!
J. Questions and Answers
How long will this take me?
Depending on how many banks you want to consider and whether
you can access good recommendations in the normal course of living
without taking a lot of time, identifying and moving your bank
account could take anywhere from 4 to 15 hours over a period of 1 to 4
weeks. If you team up with close friends and share the research,
it can go even faster! The key to speed is to winnow the list
down to the most likely candidates.
Take your time if you want to use this process to learn how the
money works in your community and to build your skills in accessing
and using financial information.
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