The first step consumers take when in need of loans or credits is going to the bank. Unfortunately, for those looking for good bank rates, bank loans, and excellent support, big banks such as Bank of America is not exactly a godsend. On the contrary, most consumers will find that small banks fail to offer competitive interest or mortgage rates and incentives that will get consumers to buy in and cash out.
The recession has, no doubt, put a tremendous damper on America’s financial system as a whole. Numerous banks have failed, leading to a domino effect reaching throughout the financial industry. Subsidized bank loans, mortgages, and high rates have led to a catastrophe in the real estate sector, which has in effect, caused numerous defaults and put many out of their homes. The effect has caused severe cutbacks and regulations. Unfortunately, severely restrictive rates and lending policies parlayed behind a non-friendly complex, ie, The Bank, are now the norm.
Large banks rule. Small banks tank. Such is the seemingly new trend among banks. Bank of America, Fannie Mae, Freddie Mac, Citigroup – these banks were too big to fail. Others like Washington Mutual, AmTrust Bank, and Citizens State Bank in Michigan were left to die. A multitude of unwise lending and debt ultimately led to a close. However, recently there has been a push to bank local.
Call it part of the Obama recession plan, or merely a general distrust of large banks. Either way, more people are looking toward smaller banks to handle their money. While the threat of closing always looms, the opportunities of banking local are far greater than going with a mass conglomerate.
Consider this, large banks do not give breaks. If a customer has a mortgage at 6%, the rate is difficult to change. Refinancing will still give consumers little reprieve. Smaller banks, however, offer room to maneuver, and customers ought to take note.
Local banks generally have actual human faces without a company byline attached. They are able to offer cheaper bank charges. Reduced charges and interest rates keep them competitive and wanting to keep customers. Their only real competition is online banking at which large banks like Bank of America excel. To catch up, local banks to need implement higher standards in online banking as well as mobile banking. Mobile banking affords customer the ease of banking from the phone.
Local banks are thriving. They are a great alternative to the large, “too big to fail” banks that suffer from quality service and competitive rates. If more people banked locally, the economy would better, competition would be up, and customers would have more choice. It would help economies at both a local and state level.
Written by Lani Shadduck
HULIQ.com
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