How to Find a Local Bank

My local bank recently got acquired, and it's already starting to act like a big bank even before they change the letterhead or the signage outside each branch. I just suffered through a week-long customer-service nightmare filled with egregious bank errors (accidentally closing down my wife's debit card), contradictory statements made by different representatives, failure to deliver (still!) a replacement card promised within 3-5 business days, proposed fees for actions necessary to resolve the bank's own errors, and a general unwillingness by any of a half-dozen representative and managers to pursue solutions on our behalf.

My search for a new bank -- specifically, a local bank -- started last night. And I know that many of you, dear readers, are searching for a new local bank, too, whether it be for more personal customer service or better rates and lower fees, or because you're motivated in some way by too-big-to-fail banks' role in this country's severe economic downturn. (Read our August 2009 article Banks That Put You First for a sampling of the special deals and better terms that consumers are discovering as they switch to local banks and credit unions.)

The challenge, you'll find, is establishing a list of truly local banks to compare – and then researching each bank to make sure it’s on solid financial ground. Skip your local Chamber of Commerce's site. That's where I started -- but quickly discovered the list of member banks to be neither comprehensive nor exclusive of big banks. Here’s where you want to go:

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To Build an Initial List of Local Banks to Compare

Visit the Independent Community Bankers of America’s site, where you can search for local banks. My search generated more than a dozen local banks, several of which I’ve never even heard of.

You also might want to search for local credit unions via the Credit Union National Association.

To Evaluate the Financial Stability of Local Banks

Start with the Federal Deposit Insurance Corp.’s Bank Find tool to determine whether your deposits at a particular bank will be FDIC-insured.

Then, look to BankRate.com's Safe & Sound rating system to see ratings of individual banks’ financial strength. Go beyond the one- to five-star rating system, and dive into BankRate's accompanying memo about each bank for hard numbers and further insights into the overall score.

Another option: You may have heard about the Move Your Money campaign, launched by Arianna Huffington and others. The campaign’s site lets you search for local banks scoring a “B” or higher in the ratings by an outfit called Institutional Risk Analytics.

To Compare Rates

Comparing banks' rates and fees on the various types of accounts and loans you have is the easy part, via quick trips to the Rates pages on individual banks' websites.