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:
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.
Was just reading this this morning. Really makes me wonder if it's a Christmas "gift" to tenants during the Christmas season, or a political maneuver of some sort. Has anyone experienced them doing this in the past? Is Fannie going to join in too?
