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Online drive urges bank customers to go local: War cry for consumers to abandon 'Big 4' may benefit institutions here
Dec 31, 2009 (The Day - McClatchy-Tribune Information Services via COMTEX) --
"Let's turn big banks into smaller banks."
With that rallying cry, online news maven Arianna Huffington and four dinner-party guests this week launched an online appeal to consumers to move their money from the bailout-hungry and credit-hoarding banks on Wall Street to the more agile, loan-friendly banks on Main Street.
Executives at southeastern Connecticut banks that could profit if the plan goes viral noted Wednesday that the shift already appears to be under way but welcomed the populist movement Huffington is trying to launch.
"Chelsea Groton never asked for taxpayer dollars, and we have never stopped lending," said Tom Kasprzak, bank vice president.
"I don't know where the movement is going to go, but it really just shows how concerned people are getting, and they're starting to pay more attention to what's happening in Washington and how issues are addressed. Many people are not happy."
In the online article "Move your Money: A New Year's Resolution," Editor-in-Chief Huffington and co-author Rob Johnson accuse the "Big Four" banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo, which all received "billions in taxpayer money" -- of cutting lending to businesses by $100 billion.
The stranglehold big banks appear to have on loans and credit to businesses and consumers alike can be broken if individual consumers and businesses shift their allegiances -- and their dollars -- to community banks, the authors write.
Their video, which draws parallels to the film "It's A Wonderful Life," and their site, www.moveyourmoney.info, steer people toward an IRA Bank Rating Web site, where the addresses of local bank branches surface when a local ZIP code is plugged in.
The video splices scenes from the movie about the miraculous rescue of a small banker during the Great Depression with footage from CNN and Congressional hearings about the current recession's tightening of credit and bailout of the country's financial giants.
By late Wednesday, more than 2,400 comments had accumulated on the Huffington Post editorial, including this one from "StatueOfLiberal": "I see a lot of posts on here by people who've made the switch already and are, like me, ecstatic about the positive results."
Liberty Bank, based in Middletown, has seen the same thing.
"We've seen a dramatic increase in refinancing for first mortgages," year over year, said Deb Bochain, executive vice president of the bank's retail banking group. "The highest percentage, more than a third, were coming from large national banks like Bank of America and Countrywide."
Liberty Bank also saw "significant" growth in deposits this year, "more so than projected, without doing any special campaigns," Bochain said. "We saw people moving their money, the consumer wanting to deal with banks more locally."
The Norwich-based Dime Bank has likewise seen consumers leaving bigger banks for its services, said Nick Caplanson, chief financial officer for the Dime Bank. The Dime in early December promoted a pool of $10 million that it is making available to those who qualify for loans.
"We certainly want to get the message out" that the Dime has money to lend, said Caplanson. "This (online push) will probably help."
Executives at The Dime and Chelsea Groton banks added that their lending practices have always been inclusive, while remaining prudent.
"We have not been subscribing to the business model of the bigger or Wall Street banks in terms of limiting credit," said Caplanson.
Bank of America takes exception to that characterization.
In 2009, it extended more than $570 billion in credit to its customers and repaid $45 billion of taxpayers' bailout money, with interest, said Jerry Dubrowski, a Bank of America spokesman.
"When you look at the facts, the conclusion is inarguable that we've been lending to customers and making every good loan that we can," he said.
"We serve everyone from the individual customer all the way up to some of the largest customers in the world. We do business with 98 percent of the Fortune 500 companies in the country. I'm not sure that going to a community bank works for each and every customer."
Added Bochain: "Consumers need to form their own conclusions and understand what each institution offers."
p.daddona@theday.com
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