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February 2, 2012 / Andrew

10 Reasons to Break Up With Your Mega-Bank

1.      You want to support small, local, US businesses — The New Rules Project reported in 2010 that the 20 biggest banks “devote only 18 percent of their commercial loan portfolios to small business,” despite the clear need to spur small-business growth to jump-start our economy.

2.     You don’t want your money paid out as a fat bonus for a CEO – While most of us continue to feel the effects of the 2008 global economic downturn, mega-bank CEOs as a group have seen their pay skyrocket back to 2008 levels and higher. The same banks that took billions of dollars in taxpayer bailouts promptly rewarded their highest-paid employees with bonuses. The Financial Times reports that big-bank CEO pay rose 36 percent in 2010, while average workers in private industry saw their pay rise only 2 percent.

3.      You don’t want to fund climate change.  — A recent report from BankTrack.org entitled Climate Killers finds that JPMorgan Chase, Citi, and Bank of America led banks worldwide in financing coal since 2005. 

4.      You want to support banks whose practices won’t cause another foreclosure crisis – Unlike conventional banks that lent billions in unsound and predatory sub-prime mortgages that their borrowers couldn’t repay, community banks and credit unions are long-time experts at responsible lending, especially to lower-income homeowners.

5.      You expect your money to be invested in your community, not used for speculation – Community investing banks and credit unions turn your deposits into loans and investments for other homeowners and small businesses in your community.  By contrast, conventional banks devote huge segments of their portfolios to speculative trading and financial tricks that may turn a profit (for the bank), but add risk to the system, and provide no benefit for their customers.

6.    You want your money to help communities that are hard-hit. –  Whether they are bearing the brunt of a hurricane, earthquake, or other natural disaster – or a human-caused disaster like the financial meltdown – communities in need can turn to community investing institutions for assistance.  Community investing banks and credit unions help to rebuild damaged communities and support social services for those in need.

7.   You’re sick of hidden charges and high fees – Bank of America’s plan to charge $5 per month for debit cards was met with such backlash last fall that they rescinded the plan, but that’s no reason to stick with a bank that wants to charge you to use your own money.  Find a community bank or credit union with policies you like better.

8.    You want to be a name, not a number.  To a mega-bank you are just one of millions of accountholders.  By contrast, community investing banks and credit unions will treat you as a person and a valued member of their community.

9.   You can find comparable services with none of the big-bank drawbacks – All personal holdings in banks and credit unions covered by FDIC or NCUA insurance are insured up to $250,000 per type of account.  You’re not taking on any additional risk by moving to a greener bank, you’re just putting your money to work for your community.

10.    You want to join a growing movement for good– Funds invested in all community investing institutions grew from $5 billion in assets to nearly $40 billion over the last decade.  Much of that growth was driven by consumers like yourself. As more and more Americans continue to pull their money from the mega-banks to invest in local communities, together we can rebuild a greener American economy

8 Comments

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  1. AbbydonKrafts / Feb 2 2012 2:52 pm

    I used to have 3 BofA accounts. I closed all of them and went with Associated Credit Union. I did this mainly because of #7 and 8. To add to #7: Credit Unions have much lower interest rates. The absolute highest credit card rate at ACU is 12%. That’s less than the CapitalOne and other cards I have, especially considering they all peak out at 24.9% when a single late payment happens, regardless of account age and payment history.

    I highly recommend switching to a credit union!

  2. ok9otj / Feb 7 2012 12:08 pm

    Reblogged this on Todo Chronicles.

    • Keith / May 24 2012 8:16 pm

      That’s not a bad rate for unsecured loan. Part of the reaosn they are higher interest is because they have no collateral. They are giving you money based only on a signature guarantee.Really isn’t a bad rate at all.The interest rate that the Fed cut was bank to bank rates. Even mortgages will only be slightly effected. Anything with a fixed rate will not be effected.

  3. KG / Feb 7 2012 12:40 pm

    I agreed that leaving my mega-bank and putting my money in a small, local CU was the right thing to do, but I really thought it would be a sacrifice in terms of services offered, costs, convenience. But I was WRONG! My CU has a much better online bill paying services, is ALWAYS willing to help me with questions – I never have to wait in long longs to talk to someone who knows nothing about banking. Has much, much lower fees. I can’t believe I stayed with that nasty institution as long as I did. Thanks to the “Move Your Money” movement!!!

  4. josie / Feb 7 2012 1:55 pm

    My ex had a checking acct at BofA also. It cost him $12.00 a month just to have it, but he received a $2.00 discount for having direct deposit. Plus, he had to maintain a min balance of either $300.00 or $500.00. I don’t remember anymore. Thank goodness he never listened to me to close his acct at BofA and join me at my local credit union. Of course I say that now, but at the time I was a little offended because he said I was the one who was stupid. My credit union is fee free and my min balance is ONE DOLLAR. Who cares if I don’t earn hardly any interest. I earn more collecting cans and bottles anyway!

  5. Carol Harkins / Feb 21 2012 4:01 pm

    Why should I subscribe to your Green America Visa card when I can get a far better interest rate from my own credit union. My hackles were raised by the 300 million capital and profit making status of One Pacific Coast Bank. Regardless of whether the owners take any money from the bank, they are in charge of the investments and policies of the bank, and this is much different than altruism or community development. Am so tired of getting screwed. Shame on you Green America!
    I have unsubscribed from your newsletter.

    • Suzy Hayes / Feb 5 2013 11:42 am

      I ended my subscription to “Green America” after having a discussion with one of their “customer service” reps regarding “Green America” being in a contest sponsored on by “WALMART”! Are you kidding? Nothing like sleeping with the enemy! The rep was snotty and condescending and insulting. This “charter member” cancelled and ran! This was over 5-6 years ago, but I can see “Green America” hasn’t changed……………to bad.

  6. Alicia / May 3 2014 9:23 am

    Way cool! Some extremely valid points! I appreciate you writing this write-up
    plus the rest of the site is very good.

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