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The Solari Report – 04 June 2009

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In 2004, when I wrote “Where Would Jesus Bank,” I started getting a steady flow of questions about how to switch from a large bank to a local bank or credit union. As the questions grew, we published a page on our website (see Bank Intimate) with information about how to find a local bank or credit union.

I learned how few people understood the risks of depositing funds and financial data with large banking institutions. The opportunity for a strong relationship and better customer service in the better local institutions was overlooked. Many depositors did not appreciate the power we have in a highly leveraged banking system to impact our economy by shifting our deposits to the local and regional institutions that support the new and small businesses that are the engines of economic growth and employment.

Well, the change has come. Recent events underscore for all of us the value of banking with sound, grounded institutions. That means there are growing numbers of people who want to learn about how to make a successful switch.

This Thursday evening, June 4, on the next Solari Report, I will cover current developments in Money and Markets. We are expanding this section of the report. There is a lot happening and this is a great way for me to keep you posted.

Next, during Take Action, a conversation about how to find the local bank that is best for you. I will be speaking with officers of National Bank of Malvern, the community bank in Pennsylvania where I and my companies, Solari, Inc and Solari Investment Advisory Services, LLC, bank.

We will discuss:

  • the latest events in banking and what it means for community banks;
  • what steps you can take to find the right local bank or credit union for you;
  • how to develop a successful relationship with your local banker;
  • how you stay up-to-date on your bank’s financial condition; and
  • the role of community banks in your local economy.

In Let’s Go To the Movies I will review James Scurlock’s first-rate documentary Maxed Out, including how Elizabeth Warren’s research aligns with my experience in Washington and research since and why I do recommend personal responsibility/debt reduction advice from Dave Ramsey and never recommend Suze Orman.

If you are a subscriber to The Solari Report, you can post your questions at your private panel or as a comment to this blog post. If you would like to learn more about The Solari Report and subscribe, click here.

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13 Comments

  1. James:

    Excellent points.

    I will remember to caveat Ramsey in the future. I agree his debt reduction ideas are common sense. I have found that there are many people who very much value the process of the types of programs Ramsey offers. I always assumed that they were unnecessary. You just applied the common sense yourself. Easy. However, I was mistaken. Lots of people much prefer a social experience in thinking through the application of common sense.

    What I like about Ramsey is his clarity that the way to get power of a problem is to take responsibility for it. He says it loud and clear.

    Catherine

  2. I just listened to your June 4 Solari Report and your comments about Ramsey and Orman. I have no remarks about Orman as I concur with your view; however, Ramsey, I think is like most gurus in this arena.

    First, his decent from a millionaire to a peasant occurred because all of a sudden his bank called his notes for reasons that he has publicly said on air. Regardless of why his note was call, I point at that his wealth was not real wealth and was in fact debt wealth. Seems very similar to the dot com millionaires that lost their tails. So, in essence, he was a debt millionaire. I’m sure if I secured enough credit cards and other non-secured credit, I too could be a millionaire.

    Moreover, and this is where he and Suze are in lock step, he recommends that same mainstream investments like good “no-load” mutual funds and absolutely despises gold.

    His debt reduction ideas are very well founded for sure; but this is just sheer fundamental common sense. Anyway, just my view.

    James

  4. Tony:

    Canada’s banks are much more consolidated then here. However, I believe you do have smaller credit unions that provide a partial local option,

    Catherine

  5. Some options:

    1. Bank by mail, or have a second bank that you bank with by mail. Electronic deposit and internet access makes this more doable.
    2. Do more with cash and barter outside the banking system

    If you can not stay entirely out of the TW20, reduce the activity with them as much as possible.

  6. so important. i’ve been passing along this message from you for the past 2-3 years now, but many people who don’t live in big cities seem to have fewer options (although many very rural places have more).

    i’m curious to know what you, catherine, suggest when people don’t live near a bank that is local? just stay away from the TW20 as much as possible?

  7. I lived in Montreal for 2 years and I am not sure how the banking system there fits into the tapeworm. Canada only has 6 or 8 banks total, but the population is also 1/10 of the U.S. So you are sort of banking local!
    Although if I do recall, RBC was one of the top 20 tapeworm banks in Catherine’s list, but I am not sure why.

  9. I’m currently banking at Bk of America and I want to switch to a local bank here in South Pasadena, CA. I was wondering if you can offer a couple of local banks here in my area. Thx!

  10. Hello Catherine,

    I am curious if you have opinion on the Bank of Montreal.

    Thanks,
    Hans

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