Big-bank customers unhappy with checking account fees may threaten to switch to smaller community and regional banks, but research shows that few actually do so. Moebs Services found that from 2008 to 2012, 15 million to 24 million accounts switched from large to smaller banks with assets of $10 billion or less. In the last two years, however, the pace has slowed to just 1 million to 2 million a year.
At the same time, fewer banks are offering free checking accounts. About 59 percent of banks currently offer this service, compared to 80 percent in March 2010. Most banks lose money on checking accounts, but they are relationship builders for banks and consumers. While larger banks offer more ATMs and greater online banking options, community banks typically offer more hands-on customer service and lower fees for checking accounts, says Bankrate.com analyst Allison Ross.
Despite the fact that 66 percent of Americans are still angry at big banks' involvement in the financial crisis and 72 percent said they would consider switching banks if their institution raised checking fees, many are reluctant to change. It can be a huge hassle for a consumer to disentangle his or her financial life from a major bank. Small banks also struggled with stricter capital requirements under the Dodd-Frank legislation, leading to some bank failures. This may make consumers less willing to leave a major bank for a smaller one.