Credit Unions Poach Clients...

[whell]

...but it seems that it may actually help the big banks. Here's a link to a WSJ article that tells why:

http://online.wsj.com/article/SB1000...p_mostpop_read

For those who may not be able to read the full article, the upshot is that the cost per customer to a big bank is $350 - $450 per year. Credit unions and small banks have a cost per customer of $175 - $250.

It is believed that most of those moving money to smaller banks and CU's tend to be those with lower balances. If the smaller balances move out, the big bank's will have fewer customers, but the customers that remain will be more profitable. So, it could be that "Bank Transfer Day" is helping the big banks more than it may be hurting them.

[d-ray657]

In other words, this is political/economic action that is not a zero sum game. Smaller institutions gain some capital, customers have their funds in institutions that are closer and more responsive to them, and the big banks don't have to deal with the common folk.

I do wonder how much the big banks will miss all those gotcha fees.

Regards,

D-Ray

[merrylander]

What that tells me is that big banks are bloody inefficient.

[painter]

Originally Posted by d-ray657

In other words, this is political/economic action that is not a zero sum game. Smaller institutions gain some capital, customers have their funds in institutions that are closer and more responsive to them, and the big banks don't have to deal with the common folk.

I do wonder how much the big banks will miss all those gotcha fees.

Regards,

D-Ray

It's happening on eBay. Don't believe they miss the smaller seller at all.

[d-ray657]

Originally Posted by painter

It's happening on eBay. Don't believe they miss the smaller seller at all.

I capitalism is working properly then, shouldn't there should be an auction site emerging that caters to the smaller seller.

Regards,

D-Ray

[whell]

Originally Posted by merrylander

What that tells me is that big banks are bloody inefficient.

Remember that credit unions don't pay corporate income taxes. That's one reason that their cost structure is different. Their interest rates for both personal savings accounts as well as loans are generally less aggressive than the big banks or specialty loan companies, and there are caps on the size of loans that CU's can issue. Less revenue, but also lower potential costs.

[finnbow]

Originally Posted by whell

Remember that credit unions don't pay corporate income taxes. That's one reason that their cost structure is different. Their interest rates for both personal savings accounts as well as loans are generally less aggressive than the big banks or specialty loan companies, and there are caps on the size of loans that CU's can issue. Less revenue, but also lower potential costs.

.... and far fewer shenanigans.

[merrylander]

Originally Posted by whell

Remember that credit unions don't pay corporate income taxes. That's one reason that their cost structure is different. Their interest rates for both personal savings accounts as well as loans are generally less aggressive than the big banks or specialty loan companies, and there are caps on the size of loans that CU's can issue. Less revenue, but also lower potential costs.

I would be curious to know exactly how much corporate income tax B of A paid last year. I would also be curious to know if they paid back we taxpayers for the bail out.