Money,Banking and finnancial marketsFor many years you have used our local, small-town bank. One hear that you heard that the bank is about to be purchased by the Bank of America. From your Vantage...
For many years you have used our local, small-town bank. One hear that you heard that the bank is about to be purchased by the Bank of America. From your Vantage point as the retail costumer, what are the cost and the benefits of such a merger?
As one who has over the years run from small bank to small bank as the larger ones swallowed them whole, my experience has shown that the larger and more corporate the bank, the smaller the concern for the people who use its services.
This correlation appears to exist only because many banks, through government regulation, have been able to act as near-monopolies. Had a true level playing field existed in the banking industry, those with boorish customer practices would either change their ways or perish, as their customers went elsewhere.
I once had a check written to me drawn on Bank of America. I went to a branch and attempted to cash it, only to be told there would be a $6 charge for cashing their own check. I told the manager that alone would keep me from choosing their banking services.
I agree with post #2: Bank of America has online banking, a service which many small town, or local banks, do not offer. This is a definite benefit, for most people. Also, BOA has ATM machines (or is compatible with) everywhere. Again, smaller banks often do not have as many ATM options available, or charge an additional charge for using another ATM.
One cost, however, is that Bank of America might have the worst customer service in the entire banking industry. Clark Howard has highlighted BOA countess times for their "Customer No-Service" and I have personally not had a good experience with this company. I personally believe it is due to their size. They do not treat individuals with as much care because they have enough big clients to carry them.
Larger banks have more money and with more money, there are greater and perhaps easier lines of credit. They are all automated and have many services that smaller banks will never be able to offer, things like 24 hour customer service and fancy website with bill pay, automatic draft protection, and the like. However, you give up a lot as well, such a personal touch and perhaps fiscal responsibility. If banks are too big to fail, then perhaps we should not stand for it when they buy out little banks.
As others have stated, larger banks can offer many more services, often at lower prices. On the other hand, larger banks may not have as strong a commitment to the local community as local banks. Large, efficient businesses (such as Walmart) tend to put small, local businesses out of business. That's unfortunate in many ways but understandable in others.
If your small local bank is merging, meaning that the people and service will be rolled into BOA, it might be worth staying, but most of these acquisitions lead to the "rebranding" of the branch office and new corporate people in charge. My response is always to switch to a local credit union; they offer better personal service with lower or no fees.
A merger with such a big banking industry is good because of the way that a bigger banking industry is able to offer far more services to those that bank with it. This is a massive advantage that a small bank cannot compete with. However, you do need to remember you lose the personal nature of such a service.
The cost of this merger is that I will no longer be able to get the same kind of personalized service from my bank. On the other hand, the new bank will allow me some benefits because it is so big and can presumably offer many more types of services than a small bank would be able to afford.